Archive for June 3rd, 2009

Should I Refinance Now? … How About Now?

Wednesday, June 3rd, 2009

With mortgage interest rates hovering around record lows for several months before rising last week to their highest levels since January, many homeowners are wondering if they should refinance now or wait to see if rates fall again. Writing on the Pennsylvania Association of Realtors‘ blog Just Listed, Smeal’s Austin Jaffe says homeowners have a lot to gain by timing their refinancing just right. Unfortunately, he says, “there is no evidence that one can predict (mortgage) interest rate changes from period to period.”

More from Jaffe:

Since the evidence is overwhelming that it is impossible to predict short-term changes (period-to-period) in interest rates, you should not try to play this game. As a result, it is best to refinance whenever it makes sense to do so and not try to time the market. If you try to play the game, you are not likely to win more than half the time. Thus, do the calculations and if it is significantly worthwhile to refinance, do it before the advantage is gone.

Tags: Jaffe, Real Estate
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