With Rates Rising, Does Buying or Refinancing Make Sense?

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Filed under: Market Comentary

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If you have been keeping up on the recent mortgage news, there is no doubt that you know mortgage rates are on the rise. This news is definitely concerning to possible homebuyers and homeowners who are thinking about refinancing. The big question is: are you too late?

In a recent article by Nedra Rhone, she interviewed Steven Alexander, who is president of Private Mortgage Services in Atlanta, and he said, “all isn’t lost.” Alexander explained that, “Rates don’t go up vertically and come down vertically. In the coming weeks and months, there will be dips back down.”

The bottom line, according to Alexander, is that there is still time to buy a home or refinance at excellent rates. And, buyers can still take comfort in knowing that most property values have really nowhere to go but up.

With that said, here are some tips to consider before you make that important mortgage decision:

1. Have a steady income.

Alexander says, “You need to feel comfortable that you have a job that is going to continue.” It is also important to note that to refinance, you do not need to have two years of steady employment, unless you are self-employed.

2. Don’t let the past stand in your way.

Alexander says that, “If you tried to refinance and were denied, try again.” This is true due to the numerous foreclosures and short sales that have filtered through the system. And, since your home may not have appraised well six months ago, you may see different results now, which may give you the equity you need to refinance.

3. Really consider if refinancing is right for you.

According to Josh Moffitt, founder and president of Silverton Mortgage Specialists says, “People are often too quick to refinance.” He suggests taking the number of months left on the loan times the payment compared to the number of months on the new loan times that payment. He then suggests considering how you may want to  use any savings for improving your overall financial situation, focusing on possibly paying off high interest loans or even investing in home improvements that will increase your home value.

If you are seriously thinking of buying or refinancing now or in the near future, please contact me and I will let you know all of the steps you need to go through to take advantage of rates that are still very good.

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