Ask the Expert

I have a jumbo loan, and I’ll be able to qualify for refinancing in 2017. Is it true that mortgage rates will go up?

Mortgage rates are very attractive right now and are expected to remain very good.
But observers predict the Federal Reserve might hike short-term rates by a quarter-point this month (December 2016).

If you have a jumbo loan with a rate higher than 3.8 percent for a 30-year, fixed rate, you should already have looked into refinancing. Even just a quarter point drop could lower your payment by $100 on a $760,000 loan, according to The Wall Street Journal.

But, even if rates go up, you still might be able to refinance at an ideal rate.

There is really no time to waste.

According to HSH.com, borrowers are unlikely to save money by waiting longer. Although there has been a flurry of refinancing this year, some borrowers may just now qualify to refinance as their debt-to-income ratios drop and credit scores go up.

If you are looking to refinance a jumbo, you could save money by refinancing to a 15- or 20-year term. That is good for borrowers who are well into their 30-year mortgage.

Consider your banking relationships when refinancing.

Some financial institutions will offer lower rates or discounts on closing costs to borrowers who are preferred customers. It pays to check.

Also before refinancing check the tax situation in your area. Some areas impose mortgage-transfer or other property taxes that increase closing costs. Sometimes these can be imposed if you switch lenders.