Thoughts on Refinancing

I guess every homeowner with a mortgage in this country is thinking about refinancing to take advantage of low interest rates, if they have not already done so.

I think that the economy will resume its downward spiral after this summer when people begin to realize that the "green shoots" they were led to believe were staged and short-lived.

The continuation of the bad economy will increase the chance of deflation, because people will consume less, resulting in reduced prices everywhere.

Thus, the possibility of a deflationary period will likely lead to even lower mortgage interest rates.

Therefore, I believe right now is not the best time to refinance.

With the Federal Reserve rate close to 0 percent and such fragile economic conditions in this country, I think we will experience a minimum of a two-year window to refinance at today's low interest rate or even lower.

Why endure the high cost of closing fees at the risk of having to do more refinancing later on?

The Federal Reserve will not attempt to raise interest rates for at least 18 months when we have such a poor banking system with all those buried toxic assets and no real solution insight.

Long story short, my opinion for refinancing is "Don't Do It".