Mortgage Blog

So you have found the lender that you want to work with on your home refinance.  You understand their fees and you like the loan officer that you are speaking with.  There is just one problem.  Rates aren’t low enough yet.  Your current rate is lower than current rates, or the closing costs involved negate the savings that you would obtain with a lower interest rate.  There is a solution.

Lenders and mortgage brokers can offer a rate watch solution for you.  This allows the lender to watch rates for you and contact you when rates get to the level that makes sense for your situation.  It is a general rule that a refinance makes sense if you can lower your rate by 0.5%.  This is somewhat variable depending on the closing costs and points that would be paid to achieve the lower rate.  Those costs have to be balanced with the monthly savings and the amount of time that you plan to stay in your home.  This is a simple calculation that any mortgage professional can help you understand.

Interest Rate Watch

A rate watch is a great tool for homeowners that are considering a refinance.  Honestly, all homeowners should have a rate watch setup with a lender or broker that they feel comfortable with.  There is no down side.  If mortgage refinance rates never get low enough to make sense for you, they will not contact you.  It allows for you to be contacted at the exact moment that refinancing your mortgage makes sense for you.  It is similar to setting up a set sell price or buy price on a stock.  This eliminates the risk for the homeowner.

Rates may be heading lower over the next few months (although I do not predict what rates will do) as the dollar strengthens and the government adds liquidity to the market.  If I could predict rates I would not be sitting here writing this article.  However, there is an effort to stabilize home prices and help homeowners that are having trouble with their current mortgage.  The options continue to grow for homeowners.  Take some time out of your busy schedule to setup a rate watch with a trusted lender or broker.  Explain to them that you are ready to refinance as soon as rates hit your target.  This is future business for the loan officer or broker and they will be happy to set this up with you.

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