Melissa's Mortgage Minute
Stocks closed again at record highs. Oil is up. The ECB announced they would extend their bond buying program but reduce purchases from 80 billion Euros to 60 billion Euros. The 10-year bond yields moved higher. With the Fed meeting next week it is quite possible that rates will move even higher.
If you are purchasing, the rates are what they are! But what if you are thinking of refinancing? How do you decide if it is worth it at higher rates?That all depends on why you are refinancing.
Believe it or not there are still many people that still have rates in the 5's and the 6's . Many because they have recently started new jobs or careers, had poor credit, or not enough equity. If you are saving at least 3/4% on your rate,it is still very worthwhile to refinance. After all 4.00% is a whole lot better than 6%. The need to pull equity out of your home is another reason to refinance even at slightly higher rates. Credit card rates are in the high teens, while home equity loans are getting more expensive. Your interest only period is about to expire and you don't want to deal with the much bigger new payment. These are all reasons to refinance in any rate environment.
When you are ready to move forward think about all of the rate options. Obviously we all like the security of a fixed rate. A 10-year ARM today is almost a full 1% lower in rate. Not sure how long you will be there look at the 5 or 7-year ARM's.
Its all about the overall picture!