Now is a great time for mortgage refinance prospecting, whether you work with real-time leads or aged leads. For newer queries, folks will be wondering what they can save. For aged quote requests, it’s a great time to follow up as we know much more about how the next year is likely to shape up in terms of rates.
Here are three great reasons for you to hit the phones as well as for your leads to take action while there’s still time to get a great deal.
1. Rates Are Still Within Range of Historic Lows
A lot of homeowners who’ve been sitting on the fence might say that today the best rates are in the past. While it’s true that a homeowner refinancing today probably won’t get a rate that makes the history books, it’s not fair to say that today’s rates aren’t still near historic lows. They are.
Now in mid-January 2018, current rates for refinancing are still hovering right around 4.00%. According to Wells Fargo:
- 30-Year Fixed Rate Refis: 4.375%
- 15-Year Fixed Rate Refis: 3.875%
- 5/1 ARM Refis: 4.125%
- Jumbo 30-Year Fixed Rate Refis: 4.375%
- Jumbo 15-Year Fixed Rate Refis: 4.25%
- Jumbo 7/1 ARM Refis: 4.00%
This is about where it’s been the last six months or so. And yes, this isn’t historic low territory. For comparison, here are some record lows for popular loans:
- 30-Year Fixed Rate of 3.50% on Dec. 5, 2012
- 15-Year Fixed Rate of 2.75% on May 1, 2013
- 5/1 ARM of 2.63% on May 1, 2013
- Jumbo 30-Year Fixed Rate of 3.54% on Sept. 7, 2016
Potential refinance prospects may look back at those days with regret, but our current rates are still very, very good. And it might be worth reminding them of it.
Remember that today’s Gen X and Millennial homeowners won’t remember the double-digit mortgage interest rates of the 1980s like their Baby Boomer parents will. Interest rates in 1981 averaged an eye-watering 16.63% for a 30-year loan, reaching an all-time high in October of that year of 18.45%!
Your prospects could save thousands by acting now rather than waiting. Sure, we aren’t going to see 18% interest rates anytime soon, but we could see rates of 4.5% to 5.0% by the end of 2018.
More Rate Hikes Are Coming in 2018
The Fed says more interest rate hikes are coming in 2018. And I think we should believe them. All the way back in December of 2016, experts reported the central bank was considering three quarter point increases to the benchmark Federal Funds rate in 2017. And we got them:
- March 16: a 25 basis points increase to 0.75–1.00%
- June 15: a 25 basis points increase to 1.00–1.25%
- December 14: a 25 basis points increase to 1.25–1.50%
The Fed has gone on record saying they expect three more such rates by the end of 2018. That will likely push up mortgage interest rates that consumer pay, perhaps by as much as 0.75 points above current rates. Such a rate increase of three-quarters of a point could mean thousands more spent over the course of a mortgage loan.
Now, this is of course is assuming that there isn’t a major stumble in the economy this year. There’s always a slim chance of that, but no one’s expecting that at this time. (Goldman Sach’s latest outlook was titled “As Good as It Gets.”) So the expectation is that the economy will continue to stay the course—and so will the Fed in terms of its planned rate hikes.
Time to Lock in a Good Rate Is “Running Out”
Some experts are saying that time may be “running out” for the best available rates, what with the Fed poised to raise the Federal Funds rate and key economic indicators on track to make that a reality.
This year is still a great time to act. Current rates are only slightly above those all-time lows. But rates are rather confidently expected to continue going up. It’s not unlikely that we’ll hit 4.5% or 5.0% by December. Therefore, acting now will save your leads money.
Still most folks don’t understand how even a small increase above current mortgage refi rates will impact them over the course of the loan. So it can be very helpful to illustrate. By one estimate, a one-point difference in the interest rate for a 30-year loan could cost a homeowner more than $30,000 in added interest over the life of the loan. Consider keeping a mortgage rate calculator handy to crunch the numbers in real time for your prospects.
All in all, now is the perfect time to call your refinance prospects. Particularly if you’re working with aged leads who may have put in their request months ago, you’ll want to touch base and bring them up to speed on the current mortgage market and the forecasted rate hikes for 2018. Remember to put current rates in context—they’re still a great bargain—but let them know that this opportunity won’t last much longer and waiting could cost them.
Start your new year off right with a fresh supply of high-quality aged leads from The Aged Lead Store. You’ll find thousands of sortable aged leads, ready to boost your sales, whether your business is auto, life, health, Medicare supplement or homeowners insurance, annuities, auto warranty coverage, mortgage refinance, or solar installation.