I will never forget the purchase of our first home. The year was 2006, my wife and I were recently married and we began to look at purchasing a home for us and our soon-to-be additional family members! We found a home in Ankeny we liked and, the next thing you know, we had ourselves a house. I distinctly remember the interest rate on that home back in 2006 was 6.375% on a 30-year mortgage. We were elated, as rates had never been that low before. We felt so fortunate we were able to borrow money so cheaply. Well, a couple years went by and rates continued to fall and we refinanced our home at 5%. Again, we were overjoyed and we celebrated the night we refinanced (because saving money is worth celebrating!) with a nice dinner. Well, 2011 rolled around and we decided to move; our new mortgage rate was at 3.875% (see celebration from above). Fast forward to 2016, we continued to keep our eye on mortgage rates. The Fed has been very cautious about raising rates; Britain left the E.U. which sent rates down, and before you know it we are refinancing again!
Mortgage rates are again at historical lows as you can see from the chart below.
Source: Mortgage News Daily, https://www.mortgagenewsdaily.com/mortgage_rates/charts.asp
The peak on the above graph is October 1981 at 18.45% for a 30-year mortgage. If you purchased a home in October 1981, we want to know about it! Please send your name and the October 1981 date you purchased your home to email@example.com (and, yes, we do have a prize for you!)
Long story short, if you have a 30-year mortgage and your rate is above 3.875% it would be a good idea to contact your financial advisor to inquire about a possible no-closing-cost refi. If you have a 15-year mortgage above 3.25%, it would be a good idea to contact your financial advisor about a possible refi, as well.
Refinancing can be a little bit of work, but don’t let that stop you from saving a lot of money!
PLEASE NOTE LIMITATIONS: Please see Important Disclosure Information and the limitations of any ranking/recognitions, at www.fostergrp.com/info-disclosure/. A copy of our current written disclosure statement as set forth on Part 2A of Form ADV is available at www.adviserinfo.sec.gov.