John goes over the new incredible rates in this episode of Tuesday Morning Coffee.


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JOHN:  Hey, guys.  John Jones here with another edition of Tuesday Morning Coffee.  Today’s topic is the incredibly low rates we’re seeing in the marketplace.  Just when you didn’t think they could get any lower, they have.  We’re seeing rates going in the threes right now, and I’m talking about 30-year and 15-year fixed rates that you can get under 4%.  Currently, right now we’re seeing 15-year rates around 3.375.  Some of that does depend on your credit score.  We’re seeing FHA rates dip below 4%.


We saw someone lock into 3.875 last week.  Just an incredible time to either buy a home if you’ve been thinking about that or refinance your home.  Think about it guys, rates are one of the few things in this world that are recession proof.  If you get a 30-year fixed rate, it is going to be that rate.  It is going to be that payment, that principal and interest payment for the next 30 years.  It won’t go up.  It can’t go up.


The only thing that can go up is your taxes and insurance.  Everything around us will probably go up.  Taxes will go up.  Gasoline’s going to go up.  Milk’s going to go up.  Our incomes are going to go up.  But rates will not go up if you lock in.  So they’re incredibly important if you’re buying a home.  An incredibly important factor to think of is rates.  I have some clients that are still sitting on the sidelines, some buyers still thinking prices are going to go down, and they may go down.


But what you’ve got to be careful of if they go down and it takes a year for you to jump on it, what’s that rate going to be at that time?  If that rate bumps up another point, point and a half, have you really gained any ground?  So if you have to borrow money and you’re thinking about buying a home, right now is a beautiful time.  Refinancing.  My rule of thumb on that is I want to see you know for a fact you’re going to stay in that house for another three to five years, and I want to see the rate almost 1-1/2 to 2% difference in the rate you have now before it to make sense.


There is a cost associated with it, and you just have to do the break even.  How many months at the new rate will it take me to break even on the cost of actually refinancing.  By using that scenario and then knowing how long you’re probably going to be in that house, you can probably answer that question.  If you need any names and numbers of reputable lenders, please call us.  We know a bunch.  867-3020.  Please call us if we can help you in any way.  Thank you.