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.