Should California home buyers float or lock the mortgage rate? Should California homeowners refinance their home?
It's important that you read my full report; I can sometimes get long-winded when I answer those two questions. I mean, a report about mortgage rates ain't as sexy as Uma Thurman, right? Sometimes, when I'm reiterating my advice, I rely on other respected professionals' opinion, to reinforce what I'm saying. My opinion changes as often as the market changes so you have to keep coming back.
I'll cut to the chase:
If you're buying a home I think you should cautiously float the mortgage rate, right now. Here's why: The economic figures are weak and the unrest in Pakistan has investors buying fixed-income investments like mortgage-backed securities. That drives mortgage rates lower. That could turn on a dime so it is important for you to check in daily. I'll be shocked if I don't change to a lock recommendation before next week is out.
If mortgage rates are lower, why should you refinance now instead of waiting? Look at what we said two weeks ago; we all think that the rising commodities prices (READ: Oil) are putting pressure on the prices of goods and services- that could mean stagflation. Stagflation leads to higher interest rates. While we're getting a little gift in the short-term rates could be higher in 3-6 months than they are today.
If oil keeps flirting with $100/barrel, the threat of higher rates will be omnipresent. Get while the getting is still good if you're planning to refinance.
Home purchasers should CAUTIOUSLY FLOAT their mortgage rate at application.
Home owners should start the mortgage refinance process today.
Thanks Brian,
It's amazing the greed out there. I am seeing borrowers hold out because they keep thinking rates are going to zero. Unbelievable. The same people bought when the real estate bubble was the biggest and the same people bought their stocks right before the market crashed and then sold them by emotion when it bottomed out. I really wish people would invest and make huge financial decisions with their heads and from researching and getting professional advice not from the news stories they hear on TV. Believe me, I could rant for hours but who needs that, right?