Is It Time to Refinance Your Home?

They say autumn ushers in changes. In our financial markets, October has always been a volatile month, and October 2014 definitely meets the criteria! We’ve seen the Dow swing from lows to highs. We’ve had obscure messages from the Fed. Likewise, interest rates are the lowest we’ve seen since early 2013. Is it a good time for a home refinance?

What’s happening out there?

A mix of forces is converging. A perfect storm? We don’t know, but it appears that way. Earlier in the month, the International Monetary Fund (IMF) predicted lower economic output for every region in the world, except the US. The outbreak (and the hysteria surrounding the outbreak) of the Ebola virus has spooked worldwide equity markets. Both China and Japan have released lower growth expectations at the same time that Europe is releasing lower numbers as their leaders disagree on the direction they need to head.

Stateside, the Fed has given no real timeline for interest rate action as economic results have been mixed. For example, employment is better yet the housing market lags. In the Middle East, ISIS continues to be a disruptive force, and that concerns markets.

Uncertainty drives demand for safer investments.

When everyone and everything is uncertain, money seeks shelter. The safest harbor of all is the United States, particularly, US Treasury instruments. When there is a demand for our debt obligations, that forces interest rates lower– including mortgage rates. So, the refinancing train may have left the station, but it stalled just beyond the platform. Now is the time to refinance, renovate your home, add a pool or addition, take equity out of your home, turn your ARM loan into a fixed loan, or move from a 30 year loan to a 20 year or 15 year loan.

For those of you with mortgage insurance or a second lien, many areas have appreciated, so you can refinance to rid yourself of that monthly fee while getting a great rate. Eventually, rates will start increasing again. Contact me to discuss your options!