(Originally published June 19, 2010.)
Obtaining a mortgage rate can be like a visit to the amusement park. Sometimes we ride the calm and boring choo-choo-train. Everything is stable and predictable. Other times we’re riding the roller-coaster with a blindfold on; screaming in horror as we plunge down steep drops followed by unexpected sharp rises, all while praying for the ride to end.
For the past few weeks, we road the choo-choo while geo-political and economic factors from around the world kept pressure on declining interest rates. But this past week was a roller-coaster. We saw economic data that turned out to be better than anticipated while other data worse than expected. While talking heads on MSNBC predicted a double-dip recession on the horizon, others preached that the economy will continue to improve. So interest rates, fell, then rose, then fell, then rose again.
The reality is there’s no solid conviction in either view. The uncertainty in the markets will likely keep volatility at extreme levels, with reactions in either direction when news deviates from what is expected.
So if you’re buying or refinancing, what does this mean to you? Quite bluntly, GET OFF THE FENCE AND DO SOMETHING ALREADY!
Human nature encourages home owners to time the market, waiting for rates to hit absolute bottom before they refinance. And history has consistently proven they miss the mark because they waited too long.
The same is true for buyers. Home buyers look, and shop, and procrastinate, because they believe that rates will drop more or home prices will continue to fall. And sometimes they do. But what about the lost opportunities? Buyers never measure the costs of tax deductions never taken and home equity not accumulated. In fact, the only ones that come out ahead are their landlords!
It’s time to take action. But did you notice that I never once advised necessarily locking a rate?? Consult your Mortgage Planner to personalize and tailor lock advice to your unique situation and transaction.
If you’re planning on buying a home, don’t wait for the economy to be rosy. The opportunities will be gone. And if you’re a homeowner thinking of refinancing, talk to a Mortgage Planner and determine if there’s a benefit. If there is, then APPLY NOW. Continuing to procrastinate means more months of higher payments and the likelihood that rates will rise before you pull the trigger.
Since 1992, Warren Goldberg has helped thousands of clients own their homes, refinance their mortgages, restructure their debts, and invest in real estate. Warren is known for his wide knowledge of mortgage products and wealth-creation strategies.
(Read more of Warren’s bio at www.WarrenGoldberg.com.)