While there is no way to predict the future of interest rates, I thought you might find the following excerpts from a recent Wall Street Journal article published in late March interesting….

For homeowners who have been waiting for rates to fall even further before refinancing, it might be time to pull the trigger on a deal. Rates are moving up and could stay higher for a while, experts say. The average rate for a 30-year fixed-rate home loan has climbed approximately 0.25%, according to Freddie Mac. While rates still are below where they were a year ago, some economists say they are likely to keep rising throughout 2012 and into 2013. That means your window of opportunity to lock in a rock-bottom rate might be closing soon. “If you’re considering refinancing, there’s really no point in waiting,” says Frank Nothraft, the chief economist at Freddie Mac.

Tim Barge considered refinancing his Buford, Ga., home for the last year and a half, but wanted to get the best rate possible. Last month, the 42-year-old information-technology professional decided to take the plunge. “I was at the point where I just had to do something,” he says. “I knew the rates weren’t going to go much lower.” He opted for a 30-year fixed-rate, which cut his monthly payment from $1,920 to $1,480.

Freddie Mac, Fannie Mae and the Mortgage Bankers Association all are projecting that rates will keep ticking higher this year and beyond. Freddie Mac and the Mortgage Bankers Association predict the average rate on a 30-year fixed-rate mortgage will reach 5% next year. The biggest culprit in rising rates: the spike in yields on 10-year Treasury notes over the past two weeks, which rates generally track, says Mr. Nothaft. This comes as investors who stashed their money in Treasuries as a safe haven are beginning to sell and move into riskier holdings now that the U.S. stock market and European economy are looking a bit healthier. Rates could go even higher if the Federal Reserve’s so-called Operation Twist, which temporarily pushed down long-term rates, ends in June as planned, or if inflation rises, eroding the value of bonds, Mr. Nothaft says.

“It’s a good-news, bad-news situation. The economy seems to be finally getting its legs back under it, and as a natural course interest rates are going to be back up, too,” says Keith Gumbinger, vice president at mortgage-data provider HSH Associates. But if the fledgling economic recovery falters, rates could hold steady or go back down, he says. If you wait until the end of the year to refinance, and the average 30-year rate goes up to 4.7% as Freddie Mac projects you will be paying $1,877 more per year on a $400,000 home loan than if you refinanced at rates which exist in late March, 2012.

I would like to relay a couple of points regarding this article that you should be aware of. I
already mentioned that you can’t predict the future of rates. Therefore, you should make your decision to refinance now if it makes economic sense. I can help you make that determination.

Secondly, I would like to reference Mr. Barge who was referenced in the article. While it looks like he made a good decision, waiting for over 12 months cost him over $4,000 in benefits he could have realized during that time, even if rates moved lower during that time. There is a cost of waiting if you are already in a “profit” situation. Not realizing that profit could be a very costly decision. Again, I can help you determine whether a refinance makes economic sense. Contact me anytime regarding assessing your situation.

And if you believe what is written by the Wall Street Journal, you should not delay.