Over the past five weeks, mortgage rates have consistently been hitting historic lows. During the week ending October 6, 2011, the average rate for a fixed 30-year mortgage fell to 3.94 percent, while the rate on 15-year loans diminished to a record low of 3.28 percent. It seems like the perfect time to consider refinancing options.
Policymakers Push Mortgage Rates Lower
However, experts are saying that it still might pay to wait. While there is no guarantee of such movement, signs seem to suggest that rates might fall further still. Policymakers seem determined to push rates down even lower.
For example, the Federal Reserve has announced a plan to move mortgage rates lower by buying a greater number of mortgage-backed securities. Similarly, the Obama Administration is contributing to the effort by conducting negotiations with lenders regarding viable methods of breathing life back into the struggling Home Affordable Refinance Program (HARP). HARP is designed to help borrowers with little or no equity to refinance their mortgages.
Thus, it is likely that in the short term rates will fall further, so if you are considering refinancing, it may be worthwhile to wait a little longer. Since refinancing typically costs around two percent of the mortgage value, it is not sensible to refinance too frequently. Ideally, you want to wait until you think you have the lowest possible rate, and refinance your mortgage at that time.
However, be sure not to wait too long, as in the long-run rates are likely to rebound as the economy regains strength.