Monday, 20 April 2009 20:30
by
Chris
What does that mean?
If you have a variable rate loan, whether it is a variable rate mortgage, home equity, or a credit card, now may be your best opportunity to refinance it into a fixed rate.
For example, there are a lot of people that have variable rate home equity loans that currently are at a rate of 4% or lower. If you are one of those lucky individuals and someone told you that you should refinance that to a fixed rate of 6.29% or higher, you may think that person has lost their mind. Well think about this. Rates are at historically low levels and they will eventually increase. If you plan on living in your house for several more years, it may be beneficial for you to refinance to a higher rate now, and see the benefits from that a few years from now. You may pay a higher rate today, but a few years from now, when rates could be much higher than they are today, you would be in great shape. So it kind of goes along with the saying “Short term pains lead to long term gains”. Refinance, lock in a low fixed rate(even if it is higher than what you are currently paying), and see long term benefits.
Sounds crazy, but it could make you look like a genius five years from now.