Low Interest Rates Stimulate Mortgage Lending And Refinancing
Mortgage interest rates have been falling in recent months and are at a three-year low. With rates this low, it is a good time for those who have been considering taking out a mortgage loan to purchase property to lock in a low rate. Borrowers who have a current mortgage loan may want to consider refinancing at a lower rate.
Although rates had been steadily rising through the first quarter of 2019, they began to drop in May. By July, the rate for a 30-year fixed-rate loan had fallen to 3.75 percent. For comparison, the 30-year rate was 4.54 percent in July of 2018. The decline continued and, by September 26, 2019, the 30-year fixed-rate mortgage had fallen to 3.64 percent.
Predictably, during this time there has been an increase in home sales activity and mortgage lending. The declining rates have also led some borrowers with current loans to consider refinancing to either lower their rate or pull some equity from their property.
There are several factors to consider when deciding whether to refinance. Obviously, the first consideration is the rate one will get on the refinance, but it goes beyond this simple consideration. Ultimately, the borrower must determine whether the attractiveness of a lower interest rate and lower payment upfront is not outweighed by the costs of obtaining the loan.
Barbosa Legal has a team of experienced attorneys who practice in the areas of real estate, taxation, estate planning, and accounting that can provide advice and counsel to properly structure a new loan transaction or analyze whether a refinance transaction will be beneficial to the individual borrower.