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Why Now Is A Great Time To Refinance Your Lake Wales Home

Can you imagine paying over 18% in interest on your home loan? It is true! If you financed a house in 1981, that would be the going rate. That rate seems outrageous today, as a 15-year mortgage is 2.7% APR and 30-year is at 3.4% APR.

Is now a good time for you to refinance, due to these low rates?

The answer is YES for multiple reasons. There are historical reasons, Florida-real-estate specific reasons and math to back up the decision!

Let's start by looking at a brief history of interest rates. In 1971, the year when Freddie Mac started surveying lenders, 30-year mortgages ranged from 7.29% to 7.73%. The annual average rate of inflation began rising in 1974 and continued through 1981 to a rate of 9.5%. As a result, lenders increased rates to keep up with inflation, leading to mortgage rate volatility for homeowners.

The Federal Reserve combated inflation by increasing the federal funds rate, an overnight benchmark rate that banks charge each other on money. Continued hikes in the fed funds rate pushed 30-year mortgage rates to an all-time record high of 18.63% in 1981! Eventually, the Federal Reserve's strategy was effective; inflation fell back to normal historical levels by October of 1982. Home mortgage rates went back to and remained in the single-digits for most of the next two decades.

The mortgage rates trend continued to decline until rates dropped to 3.31% in November 2012 - the lowest level in the history of mortgage rates. To put it into perspective, let's do the math. The monthly payment for a $100,000 loan at the historical peak rate of 18.63% in 1981 was $1,558.58, compared to $438.51 at the historical low rate of 3.31% in 2012.

Mortgage interest rates have been hovering near historic lows for a long time, prompting many homeowners to consider refinancing their mortgages in Florida to take advantage of lower rates and save money on their home loans.

Additionally, the housing market is hot in Florida. That means that there are limited numbers of homes for sale. With the average value of homes up, homeowners find themselves with more equity in their homes simply from appreciation in value. Thus, an increasing number of homeowners are considering cash-out refinances to tap into that home equity and convert it into usable cash. The funds can be used for any number of things, including home renovation projects to keep your space comfortable, as we spend more time at home during the pandemic.

Today's lower rates and property values may make now a great time to refinance your mortgage. If you need help evaluating if a refinance is right for you and your Lake Wales home, reach out to our local Lady Lawyer with 30 years experience at Rignanese & Associates Law. We offer full-service real estate services. Contact us at 863.294.1114 or via

{Sources: Value Penguin; Bank Rate}

© Cynthia Rignanese, Esquire


Reader Comments(1)

VDeedrick writes:

VERY well researched and written, as always. As a recently retired Realtor, I can vouch for your skills, experience, and knowledge in all aspects of Real Estate.

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