The recent economic turmoil over the past week has brought mortgage rates down to near historic lows again. According to most financial experts, this is a great time to refinance, but you better act fast. Whats the rush you may ask?
For one- the recent downgrade of the US credit rating will result in the increase in mortgage rates. Secondly, after September 30th the limits for “conforming” loans backed by the government will be reduced to $625,000.
The window of opportunity is NOW if the numbers make sense. The goal should be to end up with a mortgage rate approximately 2 percentage points below your current rate. Some clients are exploring adjustable rate mortgages in the range of 3% knowing that even if rates adjust higher at the 3 year change date, they will still allow for significant savings provided the caps on increases are minimal.