Time to Refinance?

I think that everyone is aware of what is happening in the mortgage industry. The reporters are delivering the news everyday of how home sales are falling and that lenders are tightening their belts on providing loans. Interest rates are falling and their looms the possibility of a recession. What should we do with this news and what is next?

We take this news and it gets everyone a little nervous. However, this is still the time for Innkeepers which are running a good, clean business to step up to the plate and take advantage of interest rates. Let me give you an example. We are in the process of assisting a buyer purchase a property in Maine. When we started this process back in November, we were hoping that we could find an interest rate around 7 ½%. So, we developed the business plan and in December we submitted it to four banks, two being national lenders. The results were interesting. The two national banks didn’t want to get involved, even though there was about 1.5 debt ratio. However, the two local banks reacted very differently. They are competing strongly against each other for the opportunity to finance this purchase. We now have an offer for a loan for twenty-five years, fixed for five years, at 3.28% above the treasury rate. As of January 22nd, this will provide us with a rate of 5.82%! This is astonishing!

So, if you have your financial house in order, it may be time to shop for a new interest rate. If you don’t have your finances in good shape, take steps to get them in line and use this time of interest rates being lowered to the best of your advantage!