Since the beginning of the year, 30-year mortgage interest rates fell from around 5% to 4.5%.
Now, over the past 4 weeks, 30-year mortgage rates have fallen to 4%, and for some, into the high 3% range for those with the best credit and lower loan-to-values. 20-year rates are approximately the same as 30-year rates and 15-year rates are even lower.
Mortgage interest rates are at their lowest levels since late 2017.
The interest rate environment is very favorable for anyone looking to purchase or refinance in the second half of 2019. For anyone that has a current interest rate of 5.25% or higher, it may be advantageous to evaluate refinancing in order to lower the monthly payment. The magnitude of the benefit will largely be dependent on the loan-to-value ratio and credit scores.
For those looking to reduce the current payment and save money, I would recommend monitoring mortgage rates over the next 30 to 60 days since it is anticipated that they could move lower.
Another strategy that can be attractive for some is to consider refinancing into a shorter-term mortgage. There are 10, 15, 20-year or custom mortgage term loans available. We can provide an analysis that shows the payments, the interest savings achieved and a comparison of the mortgage paydown compared to the current mortgage.
Lastly, with the rapid price appreciation in Colorado, many people who have considered getting an equity loan may have been reluctant to refinance their current first mortgage if it has a low interest rate. In some cases, it may be more beneficial to do a line of credit. We can help run the numbers to see whether it is better to leave an existing mortgage in place and obtain a Line of Credit or refinance the entire mortgage. This analysis compares the new rate versus the rate on the old mortgage plus the rate of the Line of Credit (i.e. the blended interest rate).
If you have any questions or if you want us to provide an analysis, please contact either Wayne or Kim.