A Great Opportunity to Still Refinance or Buy Your Ideal Home for Retirement

It seems this year is really flying by at a rapid pace, which means that we must all be having a lot of fun! I sincerely hope you are enjoying good health, success in your endeavors and peace of mind in your life. I am the luckiest advisor anywhere because I have the nicest clients ever!

Just a few brief comments on the last month’s record-breaking rise in interest rates. As you know, we have all been enjoying the opportunity of multiple refinances on the way down to the historic low mortgage rates of late, and I have been preaching the importance of refinancing and getting all the money possible at these levels. 

Well, in one fell swoop of the tongue, Bernanke managed to virtually torpedo the bond market and cause interest rates to rise more in one week than in any other in mortgage history. We experienced a full one percent rise in rates in a week’s time, followed by a ¼% improvement temporarily. This reduced the amount that can be financed by the same payment to most buyers by $50,000, and put a cool hold on the super-hot real estate market of the prior 12 months in San Diego and elsewhere. The multiple bids on a home within hours or days of its listing, and the willingness to substantially overpay on the asking prices just to get the home, slowed way down and virtually disappeared. That does not mean that housing and appreciation is dead, just considerably reduced and stabilized again.  

Lest anyone feel too badly, we must remember that these current mortgage rates in the low to middle 4% range are still historically low, and present a great opportunity to still refinance or buy your ideal home for retirement before the rates rise more and inflation truly kicks in, which it ultimately must and will, in my opinion.

The broad financial markets and the 2^nd Quarter were not particularly good ones. Fortunately, we had a banner 1^st Quarter, and a good July to date to offset it, putting us still in good shape year-to-date. We must count our financial blessings overall and enjoy this current strong market while it lasts. To be sure, it has lasted longer than I thought it might before a correction of substance, though we did have a pullback since I last expressed my concerns. 

Once again, true diversification, temperance and balance are the rules of the day at Heritage and have proven our best defense in times of challenge and have still allowed for excellent long-term results overall for our conservative client base.

This is a personal blog and is for informational purposes only. This information is not intended to be a substitute for specific individualized tax, legal or financial planning advice as individual situations will vary. For specific advice about your situation, please consult with a lawyer or financial professional.