Stocks Dip, Rates Flip

For the last few years, home loan interest rate updates have mostly involved mention of rate increases. But things have changed in the past few months. Read below for further details and how this may benefit you.....

​Reasons for Recent Rate Drop
Toward the end of last year and in the beginning of 2019, the Fed’s stance on rates was modified a bit. Rather than seeing inflation requiring continual rate increases, the Fed started to speak about stabilizing inflation and a neutral stance on rates for the foreseeable future.
 
This caused rates to reverse course quickly. In addition to that, the recent trade war talk and Chinese tariffs have put pressure on our stock market. Any time stocks dip, investors are usually pulling their money out to invest in “safer” places like bonds. When bonds and mortgage backed securities have this extra demand, it raises the prices and according to the law of economics, lowers rates.
 
There are other factors, but stable inflation measures and trade wars/tariffs have flipped the recent upward script for rates. The long-term is still seen to be in an upward trend, but the short-term has opened up refinance benefits for many.
 
Refinance Benefits to Consider:

• Lowering Payments, (due to lower rates or longer terms)
• Removing Mortgage Insurance (due to higher values and increased equity)
• Shortening Terms (while still maintaining same, or lower payments)
• Pulling Cash-Out (to help achieve other goals like debt-paydown, home improvement, college savings, caring for parents, etc.)
• Getting Rid of Payments (by way of a Reverse Mortgage, to help those who are house rich & cash poor)

 
Is a refinance right for you? We’re happy to discuss your personal situation and goals to help you determine this. Feel free to contact us if you’d like to discuss your personal situation.