The Fed's cut to 0.25 % and the 4.5% rumor created a little confusion and some dismay among those looking to refinance "in the fours". Except for about an hour or so of 4.75% rates last Wednesday, mortgage rates for those with the best credit and a good amount of equity remained around 5 %, still an incredible rate! So why isn't everyone jumping for joy? The problem is that In the last month, there has been a rash of media reports of a federally mandated 41/2 % interest rate, and enough people have repeated it that it is rapidly becoming a legend. America saw mortgage rates in the fours in 1944 when the VA loan progam first was introduced, and they soon climbed into the low fives by the early 50's. While the 4.5% rate is wishful thinking and if it does come to be could help to mend the housing mess, for many reasons it is just wishful thinking. The real truth is that many people know a good thing when they see it and there was a rash of refis last week, so much so that many mortgage providers have been scrambling to service all the requests. This Week's Real Estate Insight:
Even though rates are at the lowest level since 1971, people are still holding out for the holy grail of refis. My advice to those seeking to refinance is this, if you do your due diligence, and you are able to recoup your costs within a year or so, then lock into a spectacular rate, and rest assured, that even if you do not get the rock bottom rate you were hoping for, you are still doing better than 17%, which was the going rate when I first opened up Residential Properties so many years ago.
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