One mistake people make in this mortgage rate climate is to rush into refinancing because they know that rates will very likely rise at some point relatively soon. And in some ways this is the conservative way to go, given that most people would bet that a year from now mortgage rates will be higher given the improvement in the economy and the likelihood that that will persuade the Fed to stop artificially lower mortgage interest rates. So do you need to call your mortgage broker right now and lock a rate in order to get the lowest mortgage interest rate possible? Is the answer to the question “should I refinance my mortgage” always yes if rates will be rising within the next year or six months? Not necessarily.
Keep in mind that we have been in a period of rapid movement in the mortgage interest rate market, so some people look for huge changes before deciding to refinance their home mortgage. But the difference in your payment when there is an eighth or a quarter point difference can be significant in the long-term. (Important to note, however, that we are talking about getting the lowest rate on your refinance from a significantly higher rate, and not suggesting that you do a whole refinance for an eighth or a quarter because the costs will likely be prohibitive.) It may therefore be a smart move to look at very short-term, even day-to-day movements in home mortgage interest rates and get that last eighth or quarter.
As always, we cannot predict where rates will go, and the last eighth or quarter we mention above may never happen. Our only point here is that knowing that mortgage interest rates will likely rise in the coming months does not mean that the answer to the question “should I refinance my mortgage” is that you need to do it right now. It may still be prudent to watch things day by day.