If your clients wait and interest rates go up (which is likely in the not to distant future) they potentially could lose a lot more than they could gain by waiting. Yes, they might get a slightly better rate if they wait, but is that possibility worth risking losing such absurdly low rates as we have today?
Holding out for lower rates now is like holding out for a higher selling price in summer 2006 (or 2005 since you dont know the timing)... you might do a little better... but you could do a LOT worse. If you have major debt (like a mortgage) and are able to refinance to significantly improve your rate (without too large of offsetting closing costs), you should do so now.
Interest rates are being artificially suppressed by Western central banks right now and, like anything artificially suppressed (or inflated), it will revert to the mean. Unless you think you can call the timing of the reversion, advise your properly positioned clients to take advantage of these suppressed rates (if they havent already).
Mortgage Broker Or Lender, Washington, DC
Tue Feb 1, 2011
Have them refinance at "no cost" if the prevailing rates would provide them a savings. The lender premiums that are paid toward closing costs come with a rate that is higher than what it is considered "par" or zero point rates but at the same time, it is a no lose proposition. If rates come down further as you are predicting, then they can refinance again because they didn't have to pay to do the first refinance. If rates go higher, you look like a hero for recommending this hedge.
I have had clients refinance "no cost" multiple times and it is a great way to save money without paying the fees for refinancing.