I was interviewing mortgage consultant Mark Pfeiffer yesterday on the radio show. We were talking about refinancing and this new low interest rate environment. I asked him, "Does it surprise you that we are having this conversation?" Why did I ask this? Mortgage rates are under 4% again, a year ago interest rates were near 5%! Typically, you don't see this happen. So it begs the question, should I consider refinancing again? Here are a few tips from the interview:
Deal with a mortgage consultant and not someone who is just interested in selling you a new mortgage
A person who is acting as a consultant has your best interest at heart. They are willing to tell you that it isn't the right time to refinance. A mortgage salesperson will come to the conclusion that of course it is a good time to refinance (Whether it is or not). Make sure you are working with someone who has your best interest at heart.
Be careful with rates that are advertised as being lower than the market
How can a company write a mortgage with no closing costs? How can a company offer much lower rates than the market? They can't. They aren't there to give you a good deal and they certainly aren't there to work for free. Look for the fine print and the additional costs that are charged for their "great deal." I would be slow to trust and do business with any company that practices deceptive marketing.
Get a second opinion if you aren't sure about the closing costs
Mortgage companies have been known to charge excessive fees much higher than the going rate. Get a second opinion if that concerns you. Those kind of companies are banking on you not paying attention to the details.
Don't wait for lower rates
There is a tendency to think that rates are going to go lower and by waiting you are going to get a better deal. Then again this might be as good as it gets. A mortgage rate below 4% is a great deal already. It is not worth waiting and potentially missing out. At some point this window on low rates will close once and for all.
Not sure, get an opinion
You could have bought a house a year ago with much higher interest rates. Today less than 12 months later, it actually could make sense to refinance. A good mortgage consultant such as Mark Pfeiffer will run the numbers for you to see if it makes sense. For more information on Mark go to www.mortgagemark.com. Mark is the only one that I refer in the mortgage business.