I recently had a discussion with one of our VP’s at Stockton Mortgage. I made the comment, “I would but interest rates are super high.” His response was, “That’s the problem with your generation; you all have only known 4% interest rates. It wasn’t that long ago that interest rates were at 8-9%.” The thing is, he is right. Interest rates may not be at “historic lows” but they are still historically low.
What does that mean for you and me? The current interest rates shouldn’t keep us from considering a refinance or purchase because as history shows, these are still low rates. If you have been in your home for a while, you may still save money by refinancing at a lower rate. On the other hand, if you are looking to purchase a home, holding out and waiting for a better interest rate may have you waiting for a while—there is just no way to know how the rates will go up and down.
How can you be sure to get the best mortgage interest rate? I once heard someone say, “a mortgage is paid in dollars not in rates.” So instead of concerning ourselves with the lowest rate available, we need to look at the way to get the lowest cost for the time that mortgage is being paid. For example, if you only lived in a house for five years but had a 30-year fixed rate mortgage, one might argue that you have overpaid. Why? You are only using the money for five years, but you paid a premium for 25 years of fixed rate protection that didn’t get used.
At Stockton, we advise all our customers to share with us their plans for the home and their future, so we can provide them with the best mortgage solution. And to answer the question posed at the outset; no, you are not too late for low mortgage interest rates.