Should you Refinance to a Safer Fixed Rate Loan?
I couldn't resist posting a link to this great article: "Time to Refinance?"
We're living in an interesting time in economic history where the yield curve is negative. In other words, the 30 year fixed rates are actually lower than the short term adjustable rates. You can see a historical record of yield curves on this page.
Here is an excerpt from the article:
"So, do you lock in a relatively low fixed interest rate now, or take your chances? That’s something you’ll have to decide for yourself. What I can say with confidence is this: given historic and recent trends, this is a critical time for everyone to evaluate their mortgage and their options. A flattened yield curve (where long term rates are close to short term rates) does not last long. And that at this time, a fixed rate mortgage should be considered as one of those options as a way to reduce longer term risk of rate increases - especially if you aren’t planning to sell in the near future."
posted by Justin Smith @ 7/20/2006 04:06:00 PM
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