We’ve all heard of the old adage “Patience is a virtue”–whether it applies to impatiently waiting in a long grocery line or shopping for your first car. But does this proverb when shopping for your home, or refinancing your mortgage?
In a market where home owners are encouraged to “Strike when the iron is hot,” an article on RealtorMag.com expresses otherwise. With mortgage rates dipping to a new low, millions of Americas are currently rushing to refinance their mortgages and in result, have settled into the first rate they are quoted. Not a smart decision, according to LendingTree, as a 30 year fixed mortgage rate may vary by more than a percentage point.
The same article on RealtorMag.com cites a relevant scenario by MortgageDaily:
“A consumer with a credit score of 759 and a loan amount of $260,000 might have received quotes from lenders in early August ranging from 3.25 percent to 4.625 percent. By choosing the lowest rate, the borrower would save $214 a month, $2,568 a year, and nearly $74,000 over the life of the loan.”
The latest frenzy to quickly refinance on a 30 year fixed mortgage rate below 4 percent have left homeowners questioning themselves. A recent survey conducted for Lending Tree by Harris Interactive, surveyed 1,380 homeowners, and found that fewer than half of homeowners shop around to refinance their current mortgages.
So what is the moral of the story? Be a smart shopper and be patient.