Existing homeowners are already responding to rates that are now at levels last seen in mid-2012. In the last week, refinancing activity jumped 16%, according to the weekly mortgage application index reported today by the Mortgage Bankers Association.
The exact path and timing for mortgage rates this year is the subject of much debate. Some market forecasters are saying that mortgage rates could set new historic lows before going up again.
The decline in the price of oil, as well as concerns about China, precipitated the financial market shift, so any signs of stability or improvement in those markets would likely lead to higher U.S. mortgage rates. And such stability would also strengthen the hand of the Fed in continuing to tighten monetary policy.
In other words, this gift horse will be galloping away before too long. If you are in a position to refinance or buy a home this spring, start your search now. Take a look at rates in your market, and investigate some mortgage options that could ease your concerns about what rates might do in the short term.
For example, a common option today is a “rate lock,” which will let you fix the quoted rate for a specified period of days, to cover the time that it takes to close on a purchase or refinance.
A “float-down” option on a rate lock will enable you to lock the rate, but also benefit from another move down if indeed rates go even lower.
These options come at a cost in terms of points or rates, but they could provide you peace of mind on getting the lowest possible rate for the life of your loan.
Talk to your Jeff Krantz and Associates at RE/MAX Lake of the Ozarks to see if these options might make financial sense for you. Follow what rates are doing by visiting realtor.com daily.