Awaiting the Fed Interest Rate Decision: Is Now a Good Time to Refinance?
Now could be a good time to refinance into a second home mortgage — if you have the credit and the equity to do so. Why? Because a couple of things are happening that may make home equity loans a little more desirable:
- The Fed could lower interest rates today.
- The Fed has just injected liquidity into the market.
Of course, even if the Fed does not lower interest rates today, the rates are still fairly low for a second home mortgage. And if you can lock in a lower rate, you could save thousands on your home mortgage loan. Also, thanks to the liquidity in the market, there is a very real possibility that banks will be more willing to lend to you.
However, it is not just that simple. Banks are still wary, and you will need good credit and plenty of equity in order to refinance. No one is sure whether the housing market has reached bottom yet, and many mortgage lenders are still reluctant to lend money on a home that could go upside down.
If you do decide to try and refinance with a second home mortgage right now, here are some things to consider:
- Only refinance the amount of the loan you have left. It may not be a good time for a cash out home equity loan.
- If you can handle the payments, consider a shorter loan term than 30 years. Refinance for 20 years or even 15 years.
- Try a local bank. Such institutions may be more willing to work with you than the big banks.
- Shop around. Make sure that you look for the best deal. Mortgage lenders should be fighting for quality business right now.
Things are looking interesting on a variety of financial fronts right now. If a refinance will help your situation, it may be just the time to take care of it.
Tags: home equity loan, home equity, home mortgage loan, home equity second mortgage,
second mortgage, interest rate decision, refinance
