In this March 2020 CNN Business article, “Mortgage rates were already at record lows. Now they could go even lower,” Mike Hennessy spoke with CNN Business about the best move to make with mortgages at historic lows — moving now or waiting for lower rates.
Hennessy, founder and CEO of financial advisory firm Harbor Crest Wealth Advisors in Fort Lauderdale, Florida, said that if you're looking to refinance or secure a new mortgage, evaluate the immediate impact it will have on your finances. "If you can meaningfully save on your interest costs, build equity quicker, or extract equity at a reasonable cost to fund a renovation project, then take the bird in hand today," he said.
Other financial experts also weighed in. One expert said that for a mortgage refinance, start comparing the numbers that are being offered with what you currently have. If the new rate is 75 basis points (0.75%) lower than the current rate, that it's generally going to be worth it to refinance after the costs of the refi. If you're planning to stay in your home, run the numbers to see if it makes sense to refi from a 30- to a 15-year mortgage as well. You may be able to pay around the same amount every month and get your house paid off a lot sooner, with lower total interest costs.
Another expert noted that even before the rate cut, lenders had been offering competitive rates and including some closing costs. It's still always a good idea to shop around: You shouldn't assume you're going to get a good deal from a big bank just because you have your checking and savings account with them. The expert noted that, "Many times, the smaller, community banks offer the best deals."
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