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Strategists and Professionals Say "Refinance Now"

Luxury home foreclosure in East Cobb
Luxury home foreclosure in East Cobb
Photo: Ken Cook/Author

Navigating the world of personal finance can often be a precarious journey especially for those with the disadvantage of not understanding the basic principles of capitalism and the free market economy. If one has studied through at least the ninth grade chances are their elementary economics teacher has taught the method of "buy low" sell high. What about leveraging or controlling an existing collateral like refinancing one's own home to lower the rate, improve the terms or take cash from the equity?

Atlanta real estate investment professional John Adams of says, "at this point almost anyone owing at least $50,000 and an interest rate of 4.5% should refinance now". While John is not a mortgage industry expert he is a money expert and his advice resounds with the home owning public.

These rates also affect home purchases. Myra Cook, a senior mortgage processor who has been in the industry for nearly 20 years says, "when calculating debt ratios the interest rate has a tremendous impact on borrowing power. With rates as low as they are today potential buyers can qualify for much more home than they can when interest rates begin to move up again."

Estimating when rates will begin to increase is difficult if not impossible. Fed Chief Ben Bernanke indicates he intends to hold the fed prime rate low as long as possible to help prevent inflantionary escalation. In reality the fed rate is only a guide post and it is the market which determines actual interest rates. Back to economic basics it is more the cost of money, the rate of return and supply and demand which guide interest rates.

Housing values are still low because the supply is much greater than demand. Coupled with these truly historic interest rates it is keeping local real estate broker Jen Bowman busy helping prospective buyers locate and secure the homes of her dreams. Jen's website is a hot spot for buyers seeking luxury homes in all areas of Atlanta and recently a great bit of interest in the northwestern suburbs of Cobb County. "I think people are really seeing this opportunity to own a luxury home as a once in a lifetime or at least a very rare opportunity", states Bowman. "It's simply waking up to the understanding that this is a great time to move up and maybe the last chance most of us will ever have to see a market like this."


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