Mortgage rates have been at historic lows for awhile now.  The Fed has said they are going to keep rates low for an extended period of time.  The question is what should you do? How do you know when the best time is to lock in a lower rate?

Once you have locked in your rate, you have committed to refinance your home at that rate.  The risk is that rates may improve again.  However you are protecting yourself against rates getting worse.  Some people want to start the refinance and float, I rarely suggest that as rates may get worse and you may lose the opportunity to refinance.

Should you refinance?  You may want to consider refinancing if:

  • You have a conforming loan amount ($417,000 or less) and your interest rate is in the mid 4's.
  • You have an FHA mortgage, you may be eligible for an FHA streamline refinance.  You do not need an appraisal on an FHA streamline refinance.
  • If you want to shorten your mortgage term or if you have an adjustable mortgage.
  • If you are eligible for a HARP 2.0 refinance.  You need to have a conventional mortgage serviced by Fannie Mae or Freddie Mac, purchased by June 2009.
  • If you have an investment property and you want to increase your cash flow.  Investment properties may be eligible for HARP 2.0 loans.

With interest rates as low as they are, it makes sense to refinance now.  There is a greater chance that interest rates will increase than drop.   If you are interested in finding out what it would cost or the best option for you, contact your loan officer.  If you don't have one or need any information, please feel free to call or email me.

Leslie Vanderwerf,  NMLS ID#335509, American Mortgage and Equity Consultants – Email


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