CHARLOTTE – With interest rates being higher than we have seen since the early 2000’s, many people that are purchasing homes are hoping to use the strategy of purchasing the home now, (while it becomes a buyers’ market) and then refinancing later. The hope is that the current rate environment has led to less competition, allowing buyers to get very good deals on homes, and then they will in turn lower their rate in the future, having the combination of equity and a low payment.

This is a very sound strategy that many people have seen come to fruition that purchased in 2018-2019, and then rates dropped in 2020 and 2021, while the market rose.  Those individuals now have hundreds of thousands of dollars of equity and payments lower than they have ever seen before.  Now the question may arise, for those who just purchased, when should I refinance?  Now, this is not a hard and fast rule, but usually, the common opinion to refinance would be if the current rates are .75%-1% lower than your current note rate (or more).  At that time, you could either refinance to simply lower the rate/payment OR one can shorten the term of the loan, keeping the payment the same.  By shortening the term of the loan, one could make the same payment, but get the loan paid off in a substantially shorter amount of time, paying less interest.

As always, we will be discussing more lending strategies moving forward, but in the meantime if you have any questions, feel free to call/text/email (brandon.wolf@primisbank.com – (704) 430-6138.