Anyone that has been following the government’s involvement in buying out mortgage backed securities is aware of the impact this has had in keeping interest rates as low as they have been.
This program is set to expire in March 2010, and the glimmer that the economy has stabilized and growing ever so modestly, further suggests that the program will not be renewed.
Home owners that are staying put and are considering refinancing are not on the top of most people’s minds, however there is an opportunity that exists now, which is rapidly closing.
Most experts agree that interest rates will go up by half to a full percentage point when banks can no longer dump their bad mortgages. The backdrop to this is that several large lenders have closed many of their regional call centers creating a severe backlog. Some lenders have also started pulling back lines of credit for second mortgages.
Anyone interested in refinancing in the next several months should seriously consider doing so now rather than later as the backlog may create unforeseen delays and create an environment where considerable savings will be lost.
This also applies to those whose financial institutions provide for loan recasting (re-adjusting the balance of their loan to current rates). Check with your lender.
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