“Interest”-ing: Low Rates and Refinancing

“Interest”-ing: Low Rates and Refinancing

Roy D. Oppenheim

Roy D. Oppenheim

August 16, 2019 11:31 AM

Trade Tensions and Stock Scares:

In yet the latest escalation of trade tensions between China and the United States, this past weekend President Trump announced America will impose a 10% tariff on $300 billion of Chinese goods and China responded by suspending its purchase of US agricultural productsand lowering the value of the yuan, its currency, to its weakest point since May 20, 2008. The increased retaliation from both countries, coupled with the Federal Reserve bringing interest rates down last week, caused the Dow, a major stock market index, to plunge 900 points and saw the S&P 500 and NASDAQ, also major stock market indices, off by around 2%.

Mortgage Implications:

Late last week, these factors made investors flock to the relatively steady bond market, which pushed the yield on the 10-year Treasury down sharply, resulting in lowered interest rates. According to Mortgage News Daily, the average rate on the popular 30-year fixed mortgage hit 3.70% on Friday, the lowest value since November 2016. That rate will presumably lower, as bond yields drop even more.

Simply put, last week’s drop means that over 8 million people who have a 30-year mortgage could qualify for a refinance and even save at least 0.75% off of their current interest rate by doing so. There are several components to contemplate before deciding to refinance.

What to Consider:

A recent CNBC article looks over three factors when analyzing whether refinancing a residential or commercial mortgage makes sense: the ability to earn back investment, the seasoning of the loan, and the impact refinancing will have on other financial goals. Once those points are considered, looking towards the ways to refinance is important as well.

For instance, residential and commercial property owners can refinance using a conventional loan. With property values increasing in many areas, the amount of equity (the difference between your current mortgage and the current market value of your home) one has also increases, which makes it easier for you to refinance. Others can determine whether an FHA (Federal Housing Administration) loan is more suitable, because even if you have little or no equity in your home, a low credit score or higher debt than most lenders generally accept, the FHA guarantees that private lenders will be repaid should you default, which means banks and private lenders make loans that they ordinarily would not at competitive rates that can substantially cut your monthly payments. Furthermore, millions of veterans, as well as those in the National Guard, active duty members, and the reserve, are eligible to refinance with VA (Department of Veteran Affairs) loans.

Here to Help:

At the end of the day, taking advantage of low mortgage interest rates remains an “interest”-ing option for many people. As stated by Ben Grabsoke, president of Black Knight Data and Analytics, “Lower rates have also increased the buying power for prospective homebuyers looking to purchase the average-priced home by the equivalent of 15%, meaning that they could effectively buy $45,000 ‘more house’ while still keeping their payments the same as they would have been last fall.” In other words, increasingly favorable rates allow consumers to both refinance their mortgages and purchase affordable homes, which is definitely something to keep an eye on.

From the Trenches,

Roy Oppenheim

Oppenheim Law | Real Estate Attorneys

2500 Weston Rd, Suite 404
Fort Lauderdale, FL 33331

Originally posted on South Florida Law Blog: “Interest”-ing: Low Rates and Refinancing

Tags: mortgage, mortgage interest rates, mortgage rates, refinance, refinance using a conventional loan, stock scares, Trade Tensions

Related Articles

Marriage, Mortgages, and Millennials

by Angelica Rolong Cormier

More and more couples nowadays are cohabitating before marriage. But how does reimbursement claims work if a divorce happens?

Reimbursement Claims for Properties During a

Is This a Once in a Lifetime Opportunity to Refinance Right Now?

by Roy D. Oppenheim

If you wish to stay in your current home and refinance or buy a new home, now is the time

Should You Buy a Home During This Pandemic?

Supreme Court of New Jersey Affirms Rules as to Priority of Discretionary Advance Mortgages

by Mark Rattner

Supreme Court of New Jersey

Trending Articles

Presenting The Best Lawyers in Australia™ 2025

by Best Lawyers

Best Lawyers is proud to present The Best Lawyers in Australia for 2025, marking the 17th consecutive year of Best Lawyers awards in Australia.

Australia flag over outline of country

Legal Distinction on Display: 15th Edition of The Best Lawyers in France™

by Best Lawyers

The industry’s best lawyers and firms working in France are revealed in the newly released, comprehensive the 15th Edition of The Best Lawyers in France™.

French flag in front of country's outline

How To Find A Pro Bono Lawyer

by Best Lawyers

Best Lawyers dives into the vital role pro bono lawyers play in ensuring access to justice for all and the transformative impact they have on communities.

Hands joined around a table with phone, paper, pen and glasses

How Palworld Is Testing the Limits of Nintendo’s Legal Power

by Gregory Sirico

Many are calling the new game Palworld “Pokémon GO with guns,” noting the games striking similarities. Experts speculate how Nintendo could take legal action.

Animated figures with guns stand on top of creatures

Announcing The Best Lawyers in New Zealand™ 2025 Awards

by Best Lawyers

Best Lawyers is announcing the 16th edition of The Best Lawyers in New Zealand for 2025, including individual Best Lawyers and "Lawyer of the Year" awards.

New Zealand flag over image of country outline

Announcing the 13th Edition of Best Lawyers Rankings in the United Kingdom

by Best Lawyers

Best Lawyers is proud to announce the newest edition of legal rankings in the United Kingdom, marking the 13th consecutive edition of awards in the country.

British flag in front of country's outline

Announcing The Best Lawyers in Japan™ 2025

by Best Lawyers

For a milestone 15th edition, Best Lawyers is proud to announce The Best Lawyers in Japan.

Japan flag over outline of country

The Best Lawyers in Singapore™ 2025 Edition

by Best Lawyers

For 2025, Best Lawyers presents the most esteemed awards for lawyers and law firms in Singapore.

Singapore flag over outline of country

Announcing the 16th Edition of the Best Lawyers in Germany Rankings

by Best Lawyers

Best Lawyers announces the 16th edition of The Best Lawyers in Germany™, featuring a unique set of rankings that highlights Germany's top legal talent.

German flag in front of country's outline

How Much Is a Lawyer Consultation Fee?

by Best Lawyers

Best Lawyers breaks down the key differences between consultation and retainer fees when hiring an attorney, a crucial first step in the legal process.

Client consulting with lawyer wearing a suit

Celebrating Excellence in Law: 11th Edition of Best Lawyers in Italy™

by Best Lawyers

Best Lawyers announces the 11th edition of The Best Lawyers in Italy™, which features an elite list of awards showcasing Italy's current legal talent.

Italian flag in front of country's outline

Presenting the 2024 Best Lawyers Employment and Workers’ Compensation Legal Guide

by Best Lawyers

The 2024 Best Lawyers Employment and Workers' Compensation Legal Guide provides exclusive access to all Best Lawyers awards in related practice areas. Read below and explore the legal guide.

Illustration of several men and women in shades of orange and teal

Things to Do Before a Car Accident Happens to You

by Ellie Shaffer

In a car accident, certain things are beyond the point of no return, while some are well within an individual's control. Here's how to stay legally prepared.

Car dashcam recording street ahead

Combating Nuclear Verdicts: Empirically Supported Strategies to Deflate the Effects of Anchoring Bias

by Sloan L. Abernathy

Sometimes a verdict can be the difference between amicability and nuclear level developments. But what is anchoring bias and how can strategy combat this?

Lawyer speaking in courtroom with crowd and judge in the foreground

The Push and Pitfalls of New York’s Attempt to Expand Wrongful Death Recovery

by Elizabeth M. Midgley and V. Christopher Potenza

The New York State Legislature recently went about updating certain wrongful death provisions and how they can be carried out in the future. Here's the latest.

Red tape blocking off a section of street

Attacked From All Sides: What Is Happening in the World of Restrictive Covenants?

by Christine Bestor Townsend

One employment lawyer explains how companies can navigate challenges of federal and state governmental scrutiny on restrictive covenant agreements.

Illustration of two men pulling on string with blue door between them