When You Should Buy Down Your Interest Rate?

when you should buy down your interest rate

Our wholesale 30 year fixed rate dropped to about 5.5% this week, with 15 year fixed mortgages a tad under 5%.

Now what?

I think this is the best time to be a buyer in the market. The old saying simply states buy low and sell high. Home prices have definitely fallen over the last 18 months and with rates as low as they are, now is the time.

It’s a simple idea, but I still see many people selling when they should be buying.  If you can wait it out, now isn’t the time to sell your home. Maybe you should consider renting your current home and moving forward with the purchase of the house you’ve been eyeing for years.  Renting a home and becoming a landlord does have its risks, however you may even want to consider hiring a professional property manager.

Rates are down, should I refinance?

First you need to run the numbers. The rate difference has to be enough to repay the cost of your refinance within a reasonable time period. If the numbers work, my suggestion is to lock in on a rate and proceed ahead. Don’t try to time a bottom on rates because you might miss them. The markets have been very volatile and unpredictable over the last several months, so if the numbers work and you feel comfortable with the interest rate, lock it and get it done.  Many times consumers don’t understand that rates do indeed move everyday just like stock prices and it’s not just a line you’re being given to attract your business.  The price on your mortgage can fluctuate throughout the day. Seek counseling from a true mortgage professional and let them guide you, but in the end make the decision yourself.  If you are unclear, ask as many questions as it takes to clarify your position.  In today’s world, we need to be educated consumers that do homework and understand what we are being sold.  I have many clients who spent more time shopping around cell phone plans then shopping their mortgage loan.  Your home can be your largest asset, so show it some love.

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