Time to Refinance?

With interest rates dropping to 5.5%, have you thought about refinancing your principal residence? You’re not the only one. Since November last year, refinance applications have risen 92%, and up 16% over the last few weeks, according to the Inman News article “Refi applications climb 16.9%.”

According to Jay Brinkmann, the Mortgage Bankers Associations vice president of research and economics. “With tighter credit conditions we do not know how many of these applications will become loans, but it is clear that borrowers are responding to the 40- to 80-basis-point drop in rates we have seen since Nov. 2 across products.”

I refinanced several of my properties when the interest rates were hitting historical lows a couple of years ago. Now the rates are even lower than when I refinanced before. Is it worth it to refinance? It depends on what your present interest rate is, and on what you use the money for. If you re-finance to buy another property, you’re on the right track. Of course, you have to balance that against borrowing too much and over leveraging your real estate investments.

Time to refinance? Maybe not, but it might be worth thinking about.

For more insightful perspective on mortgages see:

The Mortgage Crises Has a Silver Lining (and other truths you won’t hear on cable news this week) at Bigger Pockets.

Info on Terry’s Book

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