Refinance Now, Even Bernanke Did

Even our Fed Chairman has refinanced and he had an adjustable at 4.125% that was going to adjust down.  With the Fed’s buying of mortgage-backed securities ending at the end of the 1st quarter of 2010 interest rates will go up.  No one knows how much and how fast but they will go up. 

Always make sure that it makes sense for you by dividing the costs of the refinance by the monthly savings to figure out how many months it will take to recover your money.  If you are unsure of how long you will be in the home my opinion is that you are better safe than sorry. 

“Locking into a fixed rate mortgage looks like a sensible thing for any homeowner to do with long rates at historic lows now. Of course, Mr. Bernanke isn’t any homeowner. One has to wonder what the decision to refinance implies about his beliefs about where rates are going in the future. Refinancing suggests he sees them going up eventually. But that shouldn’t be too big a surprise to people given that short-rates, at zero, can’t go any lower and given that Mr. Bernanke has been talking about the Fed’s exit strategy and a recovery for months. Does it say anything about the timing of eventual rate hikes or the magnitude? Very doubtful.”

http://blogs.wsj.com/economics/2009/12/18/looking-a-little-deeper-at-bernankes-floating-rate-mortgage/