What goes up must come down. Every second-grader has heard and verified this. Second-graders also are reasonably confident that two plus two equals four, and a stitch in time saves nine. By the time second-graders hit high school, they all have developed their consumer common sense, too. They know that the best time to buy something is when it goes on sale. (I checked, but there doesn’t seem to be a maxim to cover this).
This same basic precept for how consumers behave would normally cover the refinance market in Big Rapids (you would think). Following this precept, the volume of Big Rapids refinance applications would normally increase or decrease as interest rates change. After all, if you get a flyer advertising T-bone steaks for 99¢/lb., unless you are a committed vegan, you’ll make a beeline for that market. Likewise, if it looks like your monthly mortgage payment could be substantially lessened by taking advantage of lower refinance rates, it would be careless not to at least investigate further.
That used to be true, but within limits — and if those limits haven’t been reached, we are certainly close to them. Recently, the Bankrate web site was reporting that interest rates over the entire range of home loan products were falling again. The weekly national survey of large lenders notched rates that were tottering ever closer to the 3% mark across the board: 30-year and 15-year fixed mortgages; adjustables of all stripes — the works. Refinance rates were virtually flat — with 15- and 10-year offerings priced below the 3% mark! Ninety-nine cent steaks!
This is the kind of news that used to mean lenders could sit back and wait for an onslaught of Big Rapids area refinance applications… yet, if they echoed the national reports, no such traffic was on the horizon. Never mind that, as one California loan officer observed, “It’s a great time to refi; rates haven’t been this low in years.” Instead, The Washington Post headlined, “Mortgage rates sink to lowest levels in more than a year” — then followed up with a Mortgage Bankers Association reading indicating that refinance loan application volume “tumbled 9%.”
The simple fact is that rates have been so low for so long, almost every Big Rapids area homeowner who could benefit from a refinance has already done so. For them, the further notch downward doesn’t promise enough of a savings advantage to make it worth the trouble. Still others, having recently refinanced, can’t believe it could possibly be worthwhile.
In case you haven’t checked into your own mortgage arithmetic recently, I recommend at least taking a look at your last statement. There definitely are some folks in town who would benefit substantially by a refinance at this juncture.
If you have any questions on that score, or would like to compare notes regarding any other Big Rapids area real estate matter, don’t hesitate to give me a call!