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Can You Remember 1971? – Great Rates Then & Again Now

Mortgage debt A gallon of gas averaged $0.36/gallon in 1971.  Wouldn't it be wonderful to have those gas prices again today.  Driving vacations would be much nicer.  Checking prices for food, gas and other things we use every day shows clearly that looking back into time is easy, while going back is usually impossible. There's one very important cost for homeowners today that has retraced to 1971 price levels, mortgage interest.  Freddie Mac's weekly report shows the 30 year fixed rate has moved down to 4.44% for the week ended Thursday, August 12th, 2010.  A year ago, the rate was 5.29%.  That's the lowest since Freddie Mac began keeping records in 1971.  The 15 year rate is down to 3.92%, and the 5 year adjustable slid to 3.56%. Refinancing has been more popular in the last months than new purchase loans, but many have not bothered due to so much bad news about declining home values.With a $200,000 loan at 4.75% saving more than $350/month if refinanced from 7.5%, it's at least worth a look.  And those numbers are for a 30 year loan.  If your plans are to move within the next five years, you can shave even more off your monthly payment obligation. At least get an estimate of value on your home and the current payment numbers if you can refinance at these historically low rates.  Using our example above and current 3 year CD savings rates of  around 2.25%, you'd have to have more than $180,000 in 3 year Certificates of Deposit to generate a return equal to your out-of-pocket savings of the refinance. 

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