Dec 23rd, 2008
Refinance Madness
The Federal Open Market Committee just lowered their rates to about as low as you can go, and in combination with the government’s stated goal to get mortgage mortgage rates down to 4.5% (which, as long as the Feds and states like the one I live with allow tax deductibility on mortgage interest for your primary residence, combined with inflation rates of about 3%, make mortgages, especially early on, essentially negative) has been leading to not just the desired loosening of the credit market (at least on home mortgages) and I am getting a lot of anecdotal evidence that sub 5% 30 year fixed mortgages are becoming available now.
JD over at Get Rich Slowly blogged the other day on the possibility of refinancing his mortgage. Since the house I live in–I’m the guarantor on my mom’s mortgage–has a fixed mortgage rate of 5.875% (which, realistically, is perfectly fine when you look at history), I think it’s wise to look at the possibility of refinancing. I’m not the only one, I’m sure.
The other question is whether or not it’s the right time to also get a home of my own. There is a property about 1/2 mile from my mom’s house that was in the process of renovation when, I’m assuming, the owner ran out of money. It’s gone down in price about $35,000 in the last few months and I’m hoping maybe a bit more; low rates are likely to be around for a few months too. I’ll have to think about that for awhile, but I think the time to refinance is upon us.
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This is encouraging news, but I’d like to see the employment rate go up and stabilize.