Now is the time to refinance

We’re now seeing the lowest mortgage rates in nearly fifty years. Even if you are not looking to buy a new home you still might be able to take advantage of those low rates.

Mortgage rates are set based on bond trading. The easier they are to trade, the more potential interest rates have to drop.

With mortgage rates hovering between 4 and a half and 5 percent…it’s obviously a good time to buy a home.

But if you’ve recently bought your house, or have more than 20 percent equity, you can also take advantage of the lower rates.

Mortgage specialist Jim Felds said, “Those people should refinance without a doubt. They should call their mortgage broker.”

The exact interest rate will vary from bank to bank based on what banks call the spread, which is the difference between what they sell the money for and what they pay for the money.

On Wednesday the Fed cut bank to bank interest rates to basically zero, and banks now have cut mortgage rates to the lowest they’ve been since the sixties.

John Maguire at east coast mortgages says people are already starting to think about refinancing. “September and October there was no activity whatsoever. Once the good news started coming in then we’ve definitely seen at least interest.”

Maguire said some are hesitant to act right now because it’s so close to the holiday’s, but he expects more people to re-finance at the beginning of the year.

Felds says anybody with questions about re-financing should look into it. “Each and every person’s situation is unique and without having their file reviewed they won’t really know if it pays for them or if they qualify for it.”

But Maguire warns not to wait too long. “A lot of people that will wait for a rate might not get it and risk the chance of losing it.”

Not everyone is eligible for refinancing. Homeowners who didn’t have to prove their income and those whose homes have lost a lot of value probably won’t qualify.