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Is a dip in home sales ahead?
The National Association of Realtors reported that its pending home sales index was down in January, with the Southern region the only one in which the index was up. This is an indication of a dip in home sales ahead in all regions except the South.
And the Mortgage Bankers Association reports that mortgage applications were down 4.8% for the week ending Feb. 26, compared with the previous week (which included an adjustment for the Presidents Day holiday). Refinances as a percentage of mortgage activity were down to 58.6%, from 61% for the previous week.
To refinance or not?
So should you consider refinancing now before rates start rising more? Or should you wait a bit to see if there is any respite from higher rates? James Sahnger, a mortgage broker with Schaffer Mortgage Corp. in Palm Beach Gardens, Florida, says the best thing to do is talk to a lender and see what he or she can do for you.
And Mike Henry, senior vice president of residential lending at Dollar Bank in Pittsburgh, says you should definitely look into refinancing if your current interest rate is 1% or 2% above today's prevailing rates. However, also take into account the impact of closing costs.
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You probably should lock
What about locking in today's interest rates? Sahnger says: "I'm currently advising people to lock at application because, while everyone would like to have a lower rate, rates can rise quickly and no one wants a higher rate than what was offered at the beginning of the process. Also, while rates can come down, they typically do so slowly, but when they reverse, they do so quickly."
Henry advises, "If it works for, you then lock it in and you eliminate the risk of rates going up."