Our Experts Say: Refinance Now

Saturday, 20 Dec 2008 | 11:51 AM ET
Talking Mortgage Rates
Mortgage rates are at their lowest level since 1971, with CNBC's Carmen Wong Ulrich.

Right now, mortgage rates are at their lowest level since 1971. Think about that. Twenty-five years ago, we were paying as much as 18% on a 30-year fixed. Today it’s just a little over 5%.

Combine that rate with the tax advantages of a mortgage, and you have an incredibly cheap way to build wealth, Carmen says – as long as you act now.

David Kittle, chairman of the Mortgage Bankers Association, has this advice to homeowners looking to refinance: Do it. Don’t get greedy searching for another quarter-point. Lock in rates now. He is seeing applications soar over 125% just since Thanksgiving due to the low rates.

Of course, you should only refinance if it saves you at least 3/8 on the rate and if you plan on staying in your home for at least four years, Kittle says. Along with good credit, proof of income and money by means of a down payment or equity in the home, there are certain things every homeowner needs regardless of interest rate levels.