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Should you refinance your mortgage this October? Here’s what experts think.
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Homeowners and homebuyers hoping for low mortgage rates have had a rough few years. After rates fell to record lows during the pandemic, they soared in the years following as the Federal Reserve repeatedly raised interest rates to fight inflation.
Americans accustomed to rates in the 3.00% to 4.00% range or below struggled to find loans below 7%. This left many would-be borrowers sitting on the sidelines hoping low mortgage rates would some day return. This included not just buyers, but those hoping to refinance their mortgage as well.
Fortunately, the tides are turning and those eager for mortgage rates to fall have started to see that dream become a reality. Current mortgage rates and refinance rates are down more than a point off post-pandemic highs and, with the Federal Reserve cutting the benchmark rate by 50 basis points at its September meeting, it’s not surprising rates have dropped to a 2-year low.
The big question now is, should you refinance in October or wait for rates to decline further? We asked some experts for their thoughts.
See how low of a mortgage refinance rate you could secure now here.
Should you refinance your mortgage this October?
Although many homeowners will find that waiting for further rate drops is the right move, this doesn’t mean everyone should delay.
“If you need money now, it could be the perfect time to refinance,” advises Domenick D’Andrea, a financial advisor and co-founder of DanDarah Wealth Management. Many homeowners have been waiting years to refinance at an affordable rate and won’t want to delay even longer when there are finally opportunities to lower their payments or get a loan with more favorable terms.
“Locking in a lower rate can reduce monthly payments, save on interest over time, or allow for quicker repayment,” says Douglas A. Boneparth, a certified planner, Financial Advisor and President of Bone Fide Wealth. “Additionally, if your home has appreciated in-value, you might access better terms or eliminate private mortgage insurance (PMI). Refinancing ahead of the holiday season or year-end can help streamline your finances going into the new year.”
Boneparth also warns that if home values start to decline, that could impact your eligibility to refinance. It’s also worth considering that while most experts believe rates will fall, there’s no guarantee as to when or how fast that will happen.
“Timing the market exactly right is nearly impossible to do, so if your mortgage is at 7% or 8%, we highly advise talking with a mortgage professional to see what options might be available to you,” advises Nina Gidwaney, Head of Refinance and Home Equity for Chase Home Lending.
When you shop around and compare your options, you may just find that getting a guaranteed lower rate and immediate relief from high payments today is more valuable to you than waiting months for a potentially lower future rate months in the future.
Start shopping for refinance rates and lenders online today.
Waiting to refinance could pay big dividends
With mortgage rates on the decline, some homeowners have already been spurred to action.
“With a recent Fed interest rate cut of 50 basis points, we’re already seeing refinance volume pick up as homeowners look to lower their monthly payments or use the equity in their home to take out cash,” says Gidwaney.
However, acting too quickly could mean giving up the chance at lower rates are on the horizon, or potentially putting yourself in a situation where you don’t realize all the savings that could be available later.
“All signs point to potentially two more rate decreases by the end of the year,” says D’Andrea. “If you believe rates will continue in a downward trend, at least wait for the next two Fed decisions. If they only lower the rate by 25 basis points during each of the next two meetings, that could save you about $150 a month on a $500K refinance over the next 30 years.”
Beverly Hankinson, Senior Vice President and mortgage loan advisor manager at Frost Bank also warns that while the Fed cut the benchmark rate in September, that doesn’t mean borrowers will benefit from a big rate drop this October. “Remember that while the Fed has lowered short-term rates, mortgage rates, which are long-term, aren’t typically immediately affected and are slower to move.”
If rates don’t drop further this month, some buyers will still find opportunities to save but must do the math carefully to see if refinancing is worthwhile. “Refinancing may not be ideal if rates aren’t meaningfully lower than your current rate or if you face high closing costs that can outweigh the immediate benefits,” Boneparth says.
The high costs that often come with refinancing are a deterrent for homeowners who may be thinking about refinancing now and again later if rates drop further. “You want to make sure you are not going to end up doing multiple refinances since there are closing costs involved, which will negate the savings if you don’t hold the mortgage for long enough,” says Sarah Alvarez, Vice President of Mortgage Banking at William Raveis Mortgage.
The bottom line
Ultimately, the decision to refinance your mortgage now is a personal one. For some owners, it may be beneficial to take advantage of today’s lower rates immediately. Others, however, could benefit by waiting for rates to potentially fall further. Weigh your options and risk tolerance carefully and start comparing lenders and terms online now to better determine your path forward.
At least six people were killed and seven injured in an Israeli airstrike on an apartment building in Beirut overnight, Lebanon’s Health Ministry said, as governments around the world scrambled to evacuate their citizens from the country.
The airstrike hit near the residential Bashoura district.
Residents reported a sulfur-like smell following the attack, and Lebanon’s state-run National News Agency accused Israel of using internationally banned phosphorous bombs. Human rights groups have in the past accused Israel of using white phosphorus incendiary shells on towns and villages in conflict-hit southern Lebanon.
Houssam Shbaro/Anadolu via Getty Images
Israel was pursuing a ground incursion into Lebanon against Hezbollah while conducting strikes in Gaza that killed dozens, including children. The Israeli military said eight soldiers have died in the conflict in southern Lebanon.
On Wednesday, the United Nations Security Council held an emergency meeting Wednesday to address the spiraling conflict in Middle East.
Iran’s ambassador to the U.N. said his country launched nearly 200 missiles at Israel on Tuesday as a deterrent to further Israeli violence, while his Israeli counterpart called the barrage an “unprecedented act of aggression.”
Israeli Prime Minister Benjamin Netanyahu vowed late Tuesday to retaliate, and an Iranian commander threatened wider strikes on infrastructure if Israel did so. U.S. President Biden said Wednesday that he would not support an Israeli attack targeting Iran’s nuclear program.
Israel and Hezbollah have traded fire across the Lebanon border almost daily since the day after Hamas’ cross-border attack on Oct. 7, 2023, which killed 1,200 Israelis and took 250 others hostage. Israel declared war on the militant group in the Gaza Strip in response. More than 41,000 Palestinians have been killed in the territory, and just over half the dead have been women and children, according to local health officials.
Japan on Thursday dispatched two Self Defense Force planes to prepare for a possible airlift of Japanese citizens from Lebanon. And the Australian Foreign Minister Penny Wong said on Thursday her government had booked 500 seats on commercial aircraft for Australian citizens, permanent residents and their families to leave Lebanon on Saturday.
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A joint federal intelligence bulletin obtained by CBS News warns of potential violent extremism and hate crimes committed in response to the one-year mark of the Oct. 7 attack on Israel by the militant group Hamas and the resulting conflict in Gaza.
The bulletin, authored by FBI, Department of Homeland Security and National Counterterrorism Center, was first disseminated by federal law enforcement to local law enforcement partners late Wednesday.
The agencies found that the one-year mark of the attack “as well as any further significant escalations” in the Israel-Hamas war “may be a motivating factor for violent extremists and hate crime perpetrators to engage in violence or threaten public safety,” the bulletin read.
The bulletin provided several recent examples of such threats, including the Sept. 6 arrest of a Pakistani national by Canadian authorities who was accused of planning a mass shooting at a Jewish center in New York City.
The bulletin also comes as tensions have continued to ramp up in the Middle East. Following an Israeli airstrike on Beirut last week which killed longtime Hezbollah chief Hassan Nasrallah, Iran on Tuesday responded with a missile salvo on Israel, launching nearly 200 ballistic missiles, most of which were intercepted by Israel’s missile defense systems. Hamas and Hezbollah are both proxies of Iran.
Israel also began limited ground operations in southern Lebanon this week.
Following Iran’s missile attack, a senior DHS official told CBS News during a briefing Wednesday, “I don’t know that we’ve got a crystal clear assessment on that at this point. We are literally in the earliest days of trying to understand what exactly Iranian intentions might be. We do, though, assess that Iran has a global capacity and a global capability, that it can draw, that it can target U.S. interests around the world – that it certainly has the reach and capacity to do, to carry out, to engage with individuals here inside the United States in ways that present potential threat to the United States, here in the homeland.”
The official added that this is an area of “near daily engagement” between DHS, FBI and other law enforcement partners.
Iran has been involved in “a variety of other efforts in the aftermath of Oct. 7,” the official noted, including “putting out fabricated material to try to increase people’s anger about the post-Oct. 7 situation.”
The bulletin cautioned that “the expansion of the conflict further into the region could serve as motivation for violence against Jewish, Israeli, or American targets in retaliation for civilian deaths, and we cannot preclude the possibility that threat actors in the United States will react with violence to the death” of Nasrallah.
Intelligence analysts revealed in the bulletin that the Oct. 7 attack and Israel-Hamas war “have been cited as sociopolitical grievances influencing some individuals mobilization to violence in the United States,” adding that “hate crimes surged shortly following the attacks and have decreased over the past several months to levels consistent with reporting prior to the conflict, a trend that mirrors hate crimes following previous international conflicts or events.”
In the immediate months after Oct. 7, reports of antisemitic incidents surged in the U.S. The Anti-Defamation League said it recorded 2,031 antisemitic incidents nationwide between Oct. 7 and Dec. 7 of 2023, a 337% increase compared with the same period in 2022.
“Over the past year, we have observed violent extremist activity and hate crimes in the United States linked to the conflict,” the bulletin read. “Jewish, Muslim, or Arab institutions, including synagogues, mosques, and community centers, and large public gatherings, such as memorials, vigils, or other demonstrations, present attractive targets for violent attacks or for hoax threats by a variety of threat actors, including homegrown violent extremists, domestic violent extremists, and hate crime perpetrators who may view the anniversary as an opportunity to conduct an attack or other high-profile, illegal activity.”
The bulletin also warns that foreign terrorist organizations have created media that compares the Oct. 7 and 9/11 attacks and encourages “lone attackers to use simple tactics like firearms, knives, Molotov cocktails, and vehicle ramming against Western targets in retaliation for deaths in Gaza. Individuals inspired by this online messaging could act alone to commit an attack with little to no warning.”
