And welcome back mortgage rates Decreased greatly on Friday we're now Down to about a one and a half year low Regarding average 30-year fix rates so I Brought on Jim Black to kind of talk About whether or not you should actually Re-evaluate whether or not you should Refinance your mortgage right now so Jim Welcome back to the channel thanks Jason I appreciate being here and it's an Exciting time for anybody's bought a Home in the last two and a half years Because they may be able to save some Money absolutely I mean saving money is A good thing right so I mean I saw this Uh what happened yesterday on Thursday Where rates decrease um as well but Again on Friday a decrease even further We're basically on par with the lowest Level since early April of 2023 so if you purchase a home or if you Have taken on more debt over the past Couple of years then you may want to Re-evaluate whether or not to refinance As well so I want to share my screen With you guys here are daily rates According to the mortgage News Daily I Mean look at these rates um the decrease Um especially compared to the 8% rates We saw back in October last year for 30-year fix the average rate uh just Under 6.3% FHA and VA loans is around 5.7% so here's a chart looking at
Average rate um going back to early April uh last year so as you can see I Mean rates were basically on par with Around uh what 6.3 to about about 6.2% in early April of 2023 then of Course we all know that rate surg to Over 8% in October uh been it's been Kind of a bumpy ride but overall rates Have been coming down really ever since May this year so one thing I want to uh Touch on because you know we're seeing This short pullback in rates are these Rates according to the uh mortgage News Daily are those rates you actually are Seeing um in your eyes Jim because You've been a loan officer for about What 20 years or so so yeah are those Rers SE today or not yeah so that data Is normally put together by banking Associations banking associations Normally have a higher margin because They have a lot of Bank branches they Have employee benefits they have to have A higher margin than the mortgage broker Element so when they have an average Rate like that that is not truly Probably the most competitive rate that Exists so again check with your local Professional to make sure that you're Getting a realistic quote that's to your Goals rates can go as low as about 5 and A half% today you just got to make sure That it makes sense to pay costs to get That rate and so we always like to think
About refinancing now or waiting yeah Exactly sorry to interrupt um can you Tell us about the the margin how is that You know how for someone who maybe want To potentially refinance what is that Margin how is that important to them if You can kind of talk about that I know They answer this but you know if you can Tell the the viewers why that margin Matters for banks versus broker Brokers For example sure so Bankers have again Fixed costs they have a lot of think of An old big bank they have brick and Motar on every corner they have multiple Types of employees they're offering Multiple Services mortgage is one of Their programs or products that they use For us at revest and for other mortgage Brokers we only do one product mortgages So all of our capacity all of our Operations are geared toward being Efficient getting cost down and Basically giving a lower margin to our Clients so that's why I say get a quote From a mortgage broker because the Margin should most likely be lower than A banker's quote and there are a lot of Studies out there do your own homework But on average it's about 7500 to $110,000 difference in overall costs for Us to manufacture a loan on the lower Side that savings gets passed to the Consumer in lower rates and lower Fees okay that makes sense so margins a
Bank that has a lot of brick and morar a Lot of overhead has a higher margin Margin and therefore higher rates Compared to a broker that doesn't have All these you know expenses that larger Banks have because that you know smaller Margin we can offer lower rats is Basically what we're saying yeah and the Other flip side of that too is Banks Believe if theyve cross sold over seven Products with that consumer that that Consumer is most likely going to go with The convenience vence of staying at that Bank so the banks don't feel like they Have to offer a lower rate which is kind Of crazy but again the more accounts you Have at a bank the less likely it is That you're going to get a better rate Interesting yeah I mean they feel like They have the relationship already so Why not just reach out to my bank I know There's a little officer who sits at Their desk every day so yeah that makes Sense all right so I want to make sure That everyone's kind of clear on that so Because rates have been decreasing from The highs we saw back in October how Does one re-evaluate whether or not they Should refinance um or not yeah Absolutely so the first thing I want to Think about is the long-term Horizon the Objectives you have I always look at a Tenear horizon to see if it makes sense To do things so we have a great tool
That we have that I'm sharing on our Podcast today uh YouTube channel podcast Which is basically a refinance Calculator this calculator tool is free We're going to put it on the um the Channel that you can use yes sorry I'll Prov a link in the video description Below if you guys want access to this Calculator which is really great kind of Sharing how your current um payment how That compares to potentially what your New rate or new payment would be if you Were to refinance sorry go ahead Jim no Problem so in this example here we have The bottom numbers are the original Numbers so we're looking at a 550 loan Amount and an interest rate of 7% is the Loan that they got a year and a half ago Uh or two years ago let's say that Balance became $500,000 And that interest rate was 5.75 in this example what we've done is We put out a 10-year Horizon to see the Difference in savings if you refinance So we see a payment difference of 3759 Down to 2917 remember the balances are different And because we pay down a little bit of Principal but we're looking at a 10-e Horizon so over 10 years in this example You'd be saving $8,885 So if it cost $5,000 to refinance it's Worth it I think to refinance to spend $5,000 to save $80,000 in change over a
10year horizon yeah absolutely that's Really great to see the the difference There so a common question I get is Whether or not um we should wait or Refinance now of course rates are down To about what one and a half year lows Um and I think there's this common Misconception that once a Fed starts Cutting rates uh but potentially in About what two weeks now that mortgage Rates will suddenly decrease so can you Kind of talk about how do you determine Whether or not the timing is right or Not absolutely so no matter what you do You can always refinance there's no Thing holding you back from Refinancing I believe that the best Approach is to take the assumption that If I'm saving 500 bucks a month that's a Nice savings that's saving for my College savings plan for my kids that's Maybe investing in my 401k maybe it's Paying down my loan faster you have to Come up with a number that's comfortable For you as a consumer to catch the Absolute lowest rate is almost Impossible I got lucky doing it in December of 2021 when I refinanced at 1.75% on a 15-year fixed that was pure Luck it was pure luck it was not me Timing the market and I'm in an expert In this field so when the FED lowers the Interest rate all that affects is the
Cost of borrowing short-term money Short-term money is defined as credit Cards car loans home equity lines of Credit over the counter rates that the Banks can borrow to lend money out to That is a direct correlation if that Goes down a quarter percent your home Equity line of credit rate goes down a Quarter percent. but depending on the Consumer and Market um confidence Numbers and scores you could have Situation where that was already built Into interest rates being lower so it Might not affect long-term rates or it Might be a surprise for the better maybe Things are worse than we expect and that Will put a lot more pressure on Long-term interest rates going lower Faster so again it doesn't correlate Directly but if you can save money why Not save money so yeah it makes sense so If you can if you're looking at saving Hundreds of dollars per month and your Break even Point uh paying the cost of Doing a refund is a very short period of Time less than what two years yeah about Two years yeah yeah about two years you Don't want to have a break even point Five to 10 years from now and then you Move and then you just paid all the fees For refinancing and it's just not worth It um and so yeah I think kind of goes To like timing the market it's Impossible to time the market it's
Anyone's guess how low or how high rates Will go it just depends on incoming data Regarding inflation and uh more Importantly more recently uh regarding The labor market so I think that Your spot on regarding that you know People trying to time the market it's Virtually impossible because there's so Many things that impact rates in our Housing market that are completely Beyond our control so um thank you Jim Anything else you want to add regarding Um yeah absolutely and again the Question of refinance hour or weight you Have to think in your own head how many Hours a month are you worrying about This how many hours every month you Studying this because if it if you're Studying this for 20 hours a month and We're talking a difference in savings of $25 for example it's not worth your time To worry about just refinance and move On like you know we get caught up Sometimes and try to find the best deal Or the lowest deal we have to look at it Longer term than that and say over 10 Years am I saving money is this one last Thing to worry about does this savings Allow me to do more things in my life That I enjoy and if those answers are Yes refinance if those answers are no Then wait then don't worry about Refinancing but it's up to you as a Consumer we'd love to be a resource for
You again there is no cost to get a Quote for rates and again we're going to Put in the YouTube channel um link below This little link about Break Even Analysis on how to look at rates we're Available when you need us to get a rate Quote and um that's all I got for today Yeah thanks Jim yeah I'll provide a link In the video description if you guys Want access to that I think it's an app But also there's a desktop version as Well right Jim that's right and we have Other tools we'll talk about next week But this is a a simple tool just to Think it over with your family to make Sure that hey this is worth saving money And in our example we we showed there Was a big enough difference in savings That was probably worth it for that Example to refinance yeah my biggest Takeway regarding this conversation We're having right now is that I often Talk about the rates or the average Rates uh according to the U mortgage News Daily but also Freddy Mack uh but I Actually learned something that they're Looking at a survey that may have higher Um average rates than the rates we can Offer of course we're licensed officers As well but you've been in the business For like 20 plus years so um I'll Provide a link in the video description For that um app if you guys want access To that but also provide a couple links
As well if you want to schedule a call With Jim Black and I or just Jim or just Me my or just Jason whichever Way whatever then we're happy to kind of Discuss your real estate goals as well To see if it um would make sense or not And we'll give you our honest opinion as Well we had a call about what two weeks Ago with someone who was looking to Refinance and once we kind of talked About um their goals and their Circumstances it really didn't make Sense at all for them to do a refinance And you were blunt and honest with them Regarding that rather than saying Everyone should be refinancing right now Because rates at 6.2% or whatever they Are so um yeah we're advisers not real Estate pushers let's just say that Sounds great thanks again for me Jason And I look forward to seeing you soon Yeah buddy have an awesome weekend and Everyone who's watching today's video we Like you so much and we appreciate you So much for watching today's video Please like And subscribe also check out Jim's YouTube channel you just reached What 200 subscribers was it I don't have A lot I'm trying to get to 20,000 if I Get to 20,000 I will get we'll have to Figure out something that I'll do for The for your audience also to say thank You we we'll do something pretty fun so That's cool man yeah I mean I started
Off I had uh two subscribers my wife and You ex right I might have been the third One with a different encounter I don't Know but I me we all start somewhere I Posted my first video I had no idea what I was going what I was doing but yeah Congrats on getting a two 200 Subscribers G thanks so much everybody All right have awesome day everyone [Music] He [Music]
