Should you refinance NOW?

Sept 18, 2019, the Federal Reserve announced a federal funds rate cut of .25% or 25 basis points.  The immediate results of this is that funds to banks will cost less, which hopefully will affect the interest rate your bank will offer you, as a borrower.  But your bank lending rate is not based solely on the federal interbank lending rate.  Other financial data may affect your rates more heavily than the Federal Reserve’s decision.

Some of the financial data that affects mortgage rates:

Stock indices were mixed and stagnant or barely moving quickly after opening.  When investors buy shares heavily, they are usually selling bods, which pushes down Treasury prices and pushes up mortgage interest rates.  When an index stays put, it means mortgage interest rates not changed much by this.

Gold Prices climbing.  When gold rises, loan interest rates usually go down, when gold falls, rates usually go up.  Gold Prices rising will push mortgage rates down.

Oil Prices steady at $60 a barrel.  Rising Energy prices = rising inflation.  Holding steady keeps inflation – and mortgage rates steady.

It seems these and other factors indicate mortgage rates will hold mostly steady.  Experts are not expecting a huge drop just because the Federal Rate dropped, but are looking at stable rates, which might be good too. 

Whether it makes sense for you to refinance today, depends on whether refinancing today will save you enough to more than cover closing costs and whether your interest rate would drop at least half a percent, if closing costs are reasonable. 

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The strongest influence on your mortgage rates today might be how much of a credit risk you are, based on the 5 C’s of credit: character (your payment history etc.), capacity (your ability to repay), capital (amount of your own money in the property), conditions (loan terms favorable to the lender), and  collateral (the value or liquidity of the property collateralizing the loan).   You can’t control Federal Interest rates, but you can review your own attractiveness as a borrower.  So check your credit, and improve where you can.  Don’t borrower more than you can afford.  Leave the equity in the home as your capital.  Conditions: lenders lend money in order to earn a profit.  Since risk equals reward, if you lower the risk, the lender can expect less income from you and you get a lower interest rate.

Come see us at to see whether it is time for your refinance, or what you can do to prepare for the best option when you are ready for your mortgage refinace.