Tag: refinance (Page 1 of 3)

Now’s the Time: Mortgage Rates Are Dropping, but the Window May Be Short

September 12, 2025 / Tom Bonetto / 0 Comments

Mortgage interest rates have taken a welcome step lower in the past nine days—and that means homeowners have a fresh opportunity to refinance.

According to Freddie Mac, the 30-year fixed mortgage rate slid to 6.35% the week ending September 11, down about 0.15% from the prior week.

The 15-year and 20-year fixed fell as well, landing around 5.875%.

For investment properties and 2nd homes, we are seeing rates in the mid 6% range, as well.

Other industry surveys—Bankrate, Money.com, and Reuters—are showing similar declines across the board.

What’s Driving the Drop

The reason for the dip lies in the bond market. The 10-year Treasury yield, which heavily influences mortgage rates, has retreated in recent days.

Investors are increasingly betting that the Federal Reserve will begin cutting short-term interest rates later this month.

Combined with softer labor market data and easing inflation pressure, long-term yields have fallen—and mortgage rates have followed.

Treasury Dips Don’t Last Long

If this feels like déjà vu, that’s because it is. Since mid-2023, there have been eight significant downward moves in the 10-year Treasury yield.

You can see them highlighted in the chart above.

Each one of those dips lasted anywhere from just three days to three weeks before the trend reversed and rates climbed again.

That’s the key takeaway: lower-rate windows don’t last long. Waiting to see if rates fall further often means missing the opportunity altogether.

Why Refinancing Now Makes Sense

If you bought a home within the past two and a half years, there’s a good chance your mortgage rate is higher than where the market is today.

Even a small rate reduction can create meaningful monthly savings and improve long-term financial flexibility.

If you’ve recently completed a cash-out refinance, now may be an especially smart time to review your options. Lowering your interest rate can reduce the cost of carrying that debt, even if you pulled equity from your home earlier this year.

Beyond lowering monthly payments, refinancing may also help you:

Switch from a 30-year to a 15- or 20-year term, paying off your home faster.
Consolidate higher-interest debt into your mortgage at a lower rate.
Remove mortgage insurance if you’ve built enough equity.

The Time to Act Is Now

Rates are still volatile.

Inflation readings, labor reports, and Federal Reserve announcements can all shift the bond market quickly. The history since 2023 is clear: when Treasury yields dip, mortgage rates dip too—but they rarely stay down for long.

That’s why now is the time to act.

If your current mortgage is above today’s averages, let’s run the numbers together. Locking in while rates are on the downside could secure savings that last for years to come.

Here’s The Bottom Line

Lower rates don’t wait around. If you’ve bought a home in the past 2.5 years or completed a recent cash-out refinance, this is your window to refinance into a smarter mortgage.

Reach out to me today to make sure you are not missing out and we can begin to explore options.

If it’s easier, you can schedule a call with me here…

The blog postings on this site represent the positions, strategies or opinions of the author and do not necessarily represent the positions, strategies or opinions of Guild Mortgage Company or its affiliates. Each loan is subject to underwriter final approval. All information, loan programs, interest rates, terms and conditions are subject to change without notice. Always consult an accountant or tax advisor for full eligibility requirements on tax deductions.

February Mortgage Rate Projections – Things Are Getting Better

February 2, 2024 / Tom Bonetto

Mortgage Rates have improved considerably from their peak in the high 7% range.

Their trajectory this year will be highly influenced by the path of inflation and the Federal Reserve’s actions.

After hiking rates at one of the fastest paces we have ever seen in history to help reduce very high inflation, the market is anticipating that the Fed will begin cutting rates and slow the reduction of their balance sheet.

These actions should help lower mortgage rates.

Inflation Watch

One of the most important items the Fed is watching is their preferred measure of inflation, Core Personal Consumption Expenditures (PCE), which will need to move confidently towards their 2% target.

The most recent inflation reading shows that Core inflation is at 2.9%, which is still above the Fed’s target.

But the recent 6-month pace is trending at 1.85% on an annual basis and shows that inflation is heading where the Fed wants, it will likely just take some time.

The market is expecting that the Fed should start cutting rates at their May 1 meeting. If this translates to lower mortgage rates, the additional home buying interest would most likely support home prices rising further.

Home Prices and Mortgage Rates

Housing prices in the US were surprisingly resilient last year in the face of a jump in mortgage rates. Most experts see anywhere between 6% to 7% home price appreciation in 2023 when those final numbers are announced.

Now, with the prospect of interest rate cuts on the horizon, home prices are expected to climb more than previously anticipated, according to Goldman Sachs Research.

Rates have dropped to their lowest level since June 2022 recently and are now hovering in the mid-6 percent range. The decline in rates has opened up demand, which experts say is elevating prices, partly because of the low inventory of homes available for buyers.

In simple terms, lower mortgage rates will lead to more expensive homes in the future – and waiting to purchase will more than likely cost buyers more money.

If you’d like to find out more and discuss strategy moving into 2024, don’t hesitate to reach out to me!

Buy Now and Refi Later with no Lender Fees – Buy-Fi!

January 9, 2023 / Tom Bonetto

There’s a predicament facing potential buyers today. Should they wait until the mortgage and housing markets quiet down or move ahead in this unsettling economic environment?

A better question might be, “As a buyer, what are you waiting to see: mortgage rates to come down, prices to come down, or both?”

Most do believe that mortgage rates will come down in the near future, and you can find more on that here in my 2023 forecast…and there’s a ton of data to support that position.

Home Prices

Regarding home prices, however, most are still forecasting increases in home values. While listing prices may be coming down, sales prices are still rising from the same month a year ago.

The National Association of Realtors (NAR) reported the median sales price for November 2022 was up 3.5% from November 2021. Most expect December’s numbers to be in line.

Lawrence Yun, Chief Economist for NAR at their recent annual conference, forecasts home price appreciation for 2023 at +1% and for 2024 at +5%. So prices aren’t expected to go down.

So what’s a buyer to do? Well, I’d recommend that they marry the house, but date the rate. More on that here…as houses aren’t going to get any cheaper!

And I have another program in place that will help offset some of the refinance costs down the road…it’s called Buy-Fi.

How does Buy-Fi work?

Here are the specifics…

– Apply with The Lending Coach for the purchase of your new home

– Close on that purchase home loan before 4/30/23

– I’ll watch interest rates and when they drop, I’ve got you covered

– Refinance any time before 12/31/24 and I’ll waive your lender fees

Buyers can find out more regarding the specific terms and conditions on Buy-Fi here…

One final thought, owning real estate allows individuals to benefit from inflation on that large asset. The leverage from using borrowed funds to finance the purchase creates leverage that additionally works in favor of the buyer.

And residential real estate generally does extraordinarily well during inflationary/recessionary periods!

Please do reach out to me to find out more, as it would be my pleasure to help you!

Now Is A Great Time To Refinance That Investment Property

June 25, 2020 / Tom Bonetto

Mortgage rates are at all-time lows. Many homeowner’s are taking advantage and locking in for the long term. But what about investors, are they doing the same?

Refinancing rental properties can unlock a good deal of wealth-building opportunities for investors, including the ability to lower interest rates and monthly payments, improve loan terms, and earn additional cash flow.

Interestingly, many investors have not taken advantage of today’s market.

For one reason or another, there are a number of investors that don’t even realize the opportunity that’s in front of them.

Should I Refinance My Rental Property?

In most cases, investors should consider a refinance to:

Lower the mortgage rate

Take cash-out to purchase new investment properties

Convert from an ARM to a fixed-rate

Turn a hard money loan into a conventional one

Pay off the loan more quickly

Upgrade a current investment property

Much has changed in a relatively short period of time regarding rates and valuations…and they are almost all in favor of the investor.

As mentioned earlier, interest rates are historically low…and they look a lot better than they did even this time last year, let alone a few years ago.

5.75% versus 4.5% example

If you purchased an investment property in October of last year, for example, many borrowers took on mortgages with an interest rate in the high 5% range.

Today, if that investor were to refinance their $250,000 loan from 5.75% to 4.5% for example, they would save nearly $200 per month.

There might be some discount points involved depending on the scenario, but they can be financed into the loan amount, so the only out-of-pocket cost would be that of an appraisal.

Assumptions: $250K loan, 70% loan-to-value and 760+ credit score

In Conclusion

When you own an investment property, the goal is to earn a solid rate of return…and refinancing that property can increase your short-term cash flow and help you build longer-term wealth.

Do reach out to me for more, as it would be my pleasure to help you look at different options and programs that might help you in today’s market.

Economic Turbulence on the Horizon – Recession, Rates, and Real Estate

September 7, 2019 / Tom Bonetto

It does look like most economists are pointing to a recession (although most do think it will be relatively mild by historical standards) in the next 12 months.

A recession occurs when there are two or more consecutive quarters of negative economic growth, meaning GDP growth contracts during a recession.

When an economy is facing recession, business sales and revenues decrease, which cause businesses to stop expanding.

How do the economists know this? And what does this mean for interest rates and real estate values? Read on for more…

Recessionary Indicators

The Yield Curve

One of the major indicators for an upcoming recession is the spread between the 10-year US treasury yield and the 2-year US treasury yield.

While various economic or market commentators may focus on different parts of the yield curve, any inversion of the yield curve tells the story – an expectation of weaker growth in the future.

What does this inverted yield curve look like? Here’s a good depiction:

Why does inversion matter? Well, the yield curve inversion is a classic signal of a looming recession.

The U.S. curve has inverted before each recession in the past 50 years. It offered a false signal just once in that time.

When short-term yields climb above longer-dated ones, it signals short-term borrowing costs are more expensive than longer-term loan costs.

Under these circumstances, companies often find it more expensive to fund their operations, and executives tend to temper or shelve investments.

Consumer borrowing costs also rise and consumer spending, which accounts for more than two-thirds of U.S. economic activity, slows.

Unemployment

Unemployment is a recessionary factor, too – as economic growth slows, companies generate less revenue and lay off workers to cut costs.

A rapid increase in the overall unemployment levels—even if relatively small—has been an accurate indication that a recession is underway.

Here’s a chart that shows what happens when unemployment starts to trend upward – and notice that recessions follow shortly thereafter:

As you can see, when things in the economy starts to slow down, one of the first things business do is to reduce their labor force. The curve is flatting now, and unemployment might be ticking up soon.

Mortgage Rates During Recession

When a recession hits, the Federal Reserve prefers rates to be low. The prevailing logic is low-interest rates encourage borrowing and spending, which stimulates the economy.

During a recession, the demand for credit actually declines, so the price of credit falls to entice borrowing activity.

Here’s a quick snapshot of what mortgage rates have done during recessionary periods:

Obtaining a mortgage during a recession might actually be a good opportunity. As mentioned, when the economy is sluggish, interest rates tend to drop.

Refinancing or purchasing a new home could be a great way to get in at the bottom of the market and make a healthy profit down the road. A borrower should be market- and financially savvy when considering large real estate purchases in a recession

Real Estate During Recession

Believe it or not, outside of the “great recession” of 2007 (which was caused, in part, to a housing crisis), home values and real estate actually appreciate historically during times of recession.

That seems counter intuitive…but because interest rates generally drop during recessionary periods, homes become MORE affordable to potential buyers (even though property values are higher), due to the lower payments provided by those lower rates.

When more people can qualify for homes, the demand for housing increases – and so do home prices.

In Closing

Although no one likes to see recession, you can observe that it actually can be beneficial for homeowners and would-be purchasers to refinance or purchase during these periods.

If you have more questions and or would like to strategize about purchasing or refinancing, don’t hesitate to contact me, as it would be my pleasure to help you!