Un­prece­dented times: op­por­tu­nity!

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I have never seen any­thing like the mix of fac­tors we are see­ing this sum­mer. The com­bi­na­tion of the Brexit vote, an un­ex­pect­edly strong U.S. jobs re­port, and strong re­tail sales has pushed the Dow to new heights while in­ter­est rates stay low.

In late June, the vote by UK cit­i­zens to leave the Euro­pean Union rocked global stock mar­kets and led to a drop in home­loan in­ter­est rates as ner­vous in­vestors moved their funds to safer in­vest­ments in bonds. In early July, the U.S. jobs re­port came in un­ex­pect­edly high, lead­ing to greater in­vestor confidence and a surge in the stock mar­ket. As I write this in mid-July, the June re­tail sales num­bers are in, show­ing that Amer­i­cans bought more cars and other goods and in­di­cat­ing that con­sumer confidence is up. In ad­di­tion, China’s econ­omy grew in the sec­ond quar­ter, lend­ing a global push to stocks. The re­sult is that the Dow has hit a new high.

Nor­mally, I would ex­pect the rise in the stock mar­ket to be bal­anced by an in- crease in mort­gage rates as in­vestors move their funds from bonds to stocks, but that hasn’t hap­pened. Yet. That means that this sum­mer may be your best op­por­tu­nity to re­fi­nance your loan (or for some peo­ple to refi again) or buy a new home or in­vest­ment prop­erty while rates are low.

MSN Money re­ported that some top money man­agers are not con­vinced that the stock and bond mar­ket ral­lies can last. They fear that buy­ers are ig­nor­ing the long term im­pact of Brexit. Fur­ther­more, they pre­dict a slow­down in global eco­nomic growth that may only be coun­ter­bal­anced by stronger-than-ex­pected cor­po­rate earn­ings, and none of them seem to be bank­ing on that.

Your op­por­tu­nity is here now. It’s time to re­view your cur­rent sit­u­a­tion and con­sider these five strate­gies that may in­crease your net worth:

• Lower your rate and/or shorten your term to 20, 15 or 10 years. You may be able to save tens of thousands of dol­lars over the life of your loan.

• Take cash out for home ren­o­va­tions. Santa Fe homes have been ap­pre­ci­at­ing in some ar­eas over the last two or three years. You may have eq­uity you can use to up­date your kitchen or cre­ate that spa bath­room. Or pay for the new roof or stucco. The monthly pay­ment may be lower or sim­i­lar.

• Con­sol­i­date debt. Use the re­fi­nance to pay off higher-rate credit cards or in­stall­ment loans.

• Buy an in­vest­ment prop­erty. Use a cash-out refi to get the funds for the down pay­ment on a ren­tal prop­erty.

• Trade up. Take ad­van­tage of these low rates to buy your dream home.

Even if you bought or re­fi­nanced your prop­erty last year, another refi could make sense. Right now we are see­ing a high vol­ume of re­peat re­fis as clients take ad­van­tage of lower rates to move to shorter terms and/or lower rates, take cash out to buy an in­vest­ment prop­erty, im­prove their homes, pay off debt, and in some cases even de­crease or re­move PMI (pri­vate mort­gage in­sur­ance).

As al­ways, talk to a mort­gage pro­fes­sional and find out if a refi makes sense for you. In the fu­ture, we may be call­ing this the Sum­mer of Re­fis!

Fran­cis Phillips is se­nior mort­gage-loan orig­i­na­tor with First Choice Loan Ser­vices Inc. in Santa Fe. He has served as di­rec­tor of busi­ness de­vel­op­ment for na­tional mort­gage com­pa­nies. He and his mort­gage part­ners have funded and built three homes for Santa Fe Habi­tat for Hu­man­ity. Con­tact him at fran­cis.phillips@fcloans.com or 505.982.3400.

FRAN­CIS PHILLIPS

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