These Sub 5% Interest Rates won’t last forever. Infact, they already may be rising. According to Dina elBoghady of the Washington Post:
Interest rates are likely to rise to 6 percent by the end of 2010, predicted Amy Crews Cutts, deputy chief economist at Freddie Mac.The end of the Federal Reserve program that buys mortgage-backed securities will drive rates higher because private buyers will demand more return than the Fed.”Extraordinary resources have been put into keeping the rates down and supporting the mortgage markets and it’s hard to imagine that the rates can go much lower than they are,” Crews Cutts said. “Anything we get at or below 5 percent is a gift at this point.”
So it being the Christmas season and all, it sounds like if you want the gift of a lower than ever interest rate, the time to buy or refinance is now. Remember, a 1% difference in Interest rate will result in a savings of $65 for every $100,000 worth of home loan on a thirty year fixed mortgage. Over the course of a thirty year home loan this will result in a savings of $22,500 for every $100,000 of loan.