Don’t Try to Outsmart the Markets
Getting ready to refinance your mortgage but waiting for rates to fall just one more time? Is that extra 1/8th percent ready to drop? Some consumers begin to follow economic news and perform no shortage of due diligence trying to pick the perfect time to lock in an interest rate. Loan officers are asked on a daily basis, “What are rates going to do?” The fact is nobody knows and for those who say they know, well, they don’t. Yes, there are certainly general trends that can be pointed to but trying to outsmart interest rate markets can go wrong rather quickly.
If you’re waiting on rates to fall just a little bit more, you run the risk of the opposite happening and when it does, rates could move higher and never look back. When you ask your loan officer what he or she thinks rates might do, the experienced loan officers know not to answer that question directly. They can tell you where rates have been and why, but they can’t tell the future. Can you imagine how upset you would be if your loan officer suggested you hold off another week and wait for a particular economic report only to ultimately find out the loan officer was wrong and your refinance opportunity is now firmly in your rear view mirror?
The point is this: if you’ve got an attractive rate now and it makes sense to refinance, or you’ve got an accepted offer on a home and trying to time the markets, take what you have. The chances of rates moving up is higher compared to rates moving lower in our current environment. Don’t try to outsmart the markets.