Economy Rockford: Locking In a Good Rate

Many homeowners have rushed to refinance their homes with the record low mortgage rates. But some are still waiting for perhaps an even better deal. Terry Bloom, a local mortgage expert, explains why waiting isn’t the best decision.

According to Terry Bloom, the worst thing a homeowner can do is wait for a lower rate to refinance. The reason for this is, we just may have already seen that time come and go. Interest rates bounce up and down, sometimes twice a day, so Bloom says people who are holding out for a miracle “4% rate” could get shut out completely. Bloom advises to lock down savings now, when we know we have it.

“If the rates go down dramatically from the point your at, you can always refinance again if it makes financial sense. But, I would not hold out for that ultimate rate that might not ever be there. How long do I want to live in this home? And does it make financial sense to refinance based on how long I want to live in the home and how much it costs me to save this amount of money?”

Bloom says a general rule of thumb is, if you plan on moving in the next two years, you aren’t going to recover your re-fi costs.

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