By now, you’ve likely heard that the Feds will be raising interest rates several times in 2022 to address rising inflation. We’re already seeing mortgage rates begin to increase from their all-time lows interest rates.
However, we want homeowners and home buyers to realize this isn’t a black or white situation. Mortgage interest rates are still very low and home owners still have some great opportunities.
One opportunity is a cash out re-finance. Because home values have been increasing at an exponential rate, many homeowners are sitting on a lot of equity in their home. Now is a great time for borrowers to tap that equity while the rates are still low, using cash from a refi to finance home improvements, pay college tuition, or consolidate high balance credit cards.
Another opportunity is to refinance the mortgage to a shorter term and pay off their home loan sooner which can save tens of thousands of dollars in interest. Rates on 15 and 10 year loans are much lower than a 30 year mortgage, which gives the borrower an opportunity to refinance into a shorter term mortgage.
And, there are some people who have not yet picked up the phone to inquire about refinancing into a lower interest rate. Believe it or not, some borrowers are still sitting on rates between 5 and 8% interest who could really benefit from refinancing.