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Should you refinance your mortgage now that rates are falling? What experts say

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It could make sense to refinance your mortgage loan now that rates are falling, but that’s not true for every homeowner, experts say.

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Over the last couple of years, sky-high mortgage rates have made mortgage loan refinancing less appealing for homeowners. Those who got low mortgage rates during the pandemic saw no reason to refinance. Meanwhile, those with higher rates often found closing costs would eat up potential savings.

But the tide may be turning — and it could affect your mortgage decisions. While interest rates are still high compared to historical averages, they’ve recently dropped to a 15-month low. If you secured a loan in the last 18 months, you might wonder: “Is it time to refinance? Could I save money by acting now? Or should I see if rates drop further?”

To help you make an informed choice, we spoke with seasoned mortgage loan consultants. They shared their perspectives on when to refinance, when to hold off and what considerations you should weigh.

Find out the top mortgage loan rates you could qualify for here.

Should you refinance your mortgage now that rates are falling? 

The answer to that question is: It depends. Factors such as your current financial situation, the rate you initially secured and how long you’ve had your mortgage determine whether refinancing is the right move.

When refinancing could make sense

Refinancing is typically wise when it leads to significant savings over time. Josh Green, loan originator at Barrett Financial Group, suggests that a rate drop of 0.75% to 1% often justifies refinancing. This reduction typically covers the closing costs and associated expenses, allowing you to start saving money sooner.

Green points out the importance of looking at the breakeven point — which is the time it takes for your savings to outweigh the refinancing costs. 

“In my opinion, you should aim to lower your monthly payment enough to cover those costs within 24 months or less,” Green says.

Rhonda Hummel, mortgage consultant at Prosperity Home Mortgage, adds that other factors can make refinancing attractive. 

“Home values have increased, lowering the loan-to-value (LTV) for some borrowers, which could lead to a better rate,” Hummel says. 

For example, if your home’s value increased from $300,000 to $350,000 while you still owe $270,000, your LTV would drop from 90% to around 77% — potentially qualifying you for a better rate.

Your credit score can also impact your decision. If it has improved since your original mortgage, you might qualify for more favorable terms. Even a small boost in your score could translate to big savings over your loan’s lifetime.

Start comparing your mortgage loan options and find the right options now.

When it may be better to refinance later

Even when the numbers are favorable at first glance, refinancing isn’t always the best long-term strategy. Hummel shares an example that illustrates this complexity: “If you had a $1,000,000 loan at 7.50% and today’s rate is 7.00%, with closing costs of $4,500 for a ‘No Point’ refinance, you’d save $338 monthly. The breakeven point would be eight months.”

While this scenario meets the typical criteria for a beneficial refinance, “you could end up paying multiple fees on several refinances if rates continue to fall,” Hummel says. This highlights a key consideration: Refinancing too frequently can erode potential savings through repeated closing costs.

You also want to look at the size of your mortgage loan

“The benefits of refinancing are influenced by the loan size as many costs to refinance are static,” says Dean Rathbun, loan officer at United American Mortgage Corporation. 

For mortgages under $250,000, the standard 1% rate reduction often doesn’t generate enough savings to justify the costs. In these cases, waiting for a larger rate drop or exploring other financial strategies might be more prudent than rushing into a mortgage refi.

Factors to consider before refinancing

Before you commit to refinancing, our experts suggest thinking about these key factors:

  • Length of stay: How long you plan to remain in your home affects the potential savings from refinancing.
  • Loan term: Shortening your mortgage loan term can help you save on interest, while extending it may lower payments but increase the total interest paid.
  • Future life changes: Consider upcoming events like retirement that could impact your future income and qualifying ability.
  • Market timing: Weigh the risks of waiting for potentially lower rates against current savings opportunities.

The bottom line

Though no one has a crystal ball for a mortgage interest rate forecast, Green believes we’re in the early stages of a rate-dropping cycle. “If the Federal Reserve goes through with a rate cut, mortgage interest rates could continue to drop for the next 12 months or even longer,” he says. But waiting comes with risks. If you bought at peak rates and have a sizable loan, refinancing now could start saving you money. Holding out might lead to better rates later — but future market conditions are uncertain.

Your best mortgage move? Talk to several lenders. Know and discuss your options, get personalized rate quotes and be prepared to act quickly when the conditions are right. The ideal time to refinance is when it makes sense for your unique situation — not when rates hit a certain number.



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Missouri flash flooding kills 5, including 2 poll workers

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A couple in their 70s who served as election poll workers were among at least five people killed in Missouri after torrential rains caused flash flooding across the state.

Up to 8 inches of rain fell over two days in parts of Missouri, leading to widespread flooding and dozens of water rescues. It was part of a storm system that also spawned tornadoes in Oklahoma and Arkansas.

In Wright County, Missouri, a county of about 19,000 residents 210 miles southeast of Kansas City, a 70-year-old man and 73-year-old woman were in a vehicle swept away by flooding at Beaver Creek around 4:30 a.m. Tuesday, the state patrol said. The bodies of the couple from Manes, Missouri, were found more than four hours later.

Wright County Clerk Loni Pedersen confirmed that both of the people who died were poll workers.

“This is a tragic loss for Wright County,” Pedersen said in an email. “They were dedicated citizens who valued fair and honest elections.”

Three people in two other cars swept away by the fast-rising creek were able to swim to safety, the patrol said.

Severe Weather
A photo released by the Missouri State Highway Patrol shows a tractor trailer submerged in flood water on US 63, just north of Cabool, Mo., on Nov. 5.

Missouri State Highway Patrol via AP


Two other deaths were reported in St. Louis County. Firefighters were called Tuesday morning after a submerged SUV was spotted near flooded Gravois Creek, near Interstate 55. Crews broke through the sunroof and pulled out a woman, who was pronounced dead, Lemay Fire Protection District spokesperson Jason Brice said.

Hours later, a man’s body was found in the same flooded creek, Brice said. Authorities were investigating how the body got there. Fire crews rescued 10 other people from flooded vehicles, Brice said.

On Monday, Missouri state troopers recovered a 66-year-old man’s body after a car was swept off a bridge in Ironton, about 90 miles (145 kilometers) south of St. Louis.

The National Weather Service said four likely tornadoes, and possibly more, touched down in parts of Oklahoma and Arkansas on Monday. There were no reports of deaths or injuries from the tornadoes.

Keli Cain, spokesperson for the Oklahoma Department of Emergency Management, said assessments of the damage were underway.

The storms struck a day after tornadoes injured at least 11 people in the Oklahoma City area in central Oklahoma.

Cain said the department worked with the Oklahoma State Election Board to ensure that polling places were not disrupted.



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Harris wins New York, Rhode Island; Trump wins Louisiana, CBS News projects

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Harris wins New York, Rhode Island; Trump wins Louisiana, CBS News projects – CBS News


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CBS News projects that Vice President Kamala Harris will win New York and Rhode Island. Meanwhile, former President Donald Trump is projected to win Louisiana. CBS News’ Major Garrett and Robert Costa also give an update on Virginia’s race.

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Georgia Secretary of State Brad Raffensperger on record turnout, bomb threats and more

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Georgia Secretary of State Brad Raffensperger on record turnout, bomb threats and more – CBS News


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Georgia’s 2024 presidential election results are trickling in. Earlier Tuesday, false bomb threats at some poll sites delayed voting. Georgia Secretary of State Brad Raffensperger joins CBS News to discuss.

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