2024 is already shaping up to be a different year in real estate…
We are starting the year off with rates headed lower, a FED that is dovish, rate cut talks, affordability will keep getting better, and the slow path to lower rates. This news really changes the mindset and confidence of home buyers, real estate investors, and borrowers who need to refinance out of HIGH rates.
The trillion dollar question for anyone with a high rate, ARM, in need of cash out, loan coming due, private money loan, construction to perm loan, etc that needs to refinance is wondering when should they refinance but also is there enough benefit to do it in 2024. If we go back to 2018 when rates shot higher and then came way down in 2019 lots of people took advantage and refinanced. Little did they know that in 2020 -2022 they would have the opportunity to refinance again to historically low rates. Here we are again, coming off of 1.5 years of higher rates and now we see the rate trend slowly coming back down. So many people are going to get the benefit of lowering their rate/payment in the coming years.
There are some borrowers who do not have a choice; mortgage is coming due, rate has adjusted too high, they need cash out NOW or the savings TODAY makes sense. 20 years in the mortgage business and doing lots of refinances, everyone has their thoughts or methods on what they consider when the right time is to refinance.
Below is a list of what I have seen, and talked about, industry standards, and general reasons that I can think of. If it makes sense for someone that is ALL that matters, but you don’t want to get sold or pressured into a refinance if it does not make financial sense.
Lots of clients I talked to were wondering if they should just wait for rates to fall further and then refinance at that time. If you can do this then YES, this is a great idea, and you can save money on not doing 2 refinances. The risk is that rates take longer to come down and you might have wished you started to save money earlier. I am also talking to clients who are saving so much money TODAY or there is another BIG benefit to do a refinance today.
Below is the chart where current mortgage holders are locked, most borrowers with current mortgages have rates of 5% or less. These borrowers are chilling for now and will be sitting tight. If you are NOT sure what to do, talk to a mortgage professional and get their opinion. Make sure the loan officer you are talking with has your best interest first and they are not just trying to refinance you to make a commission.
I am here to help and review your mortgage, or scenario to see if a refinance makes sense NOW or to wait at a later time.
Reach out today! Looking forward to hearing from you!
