Before I go any further, I have to come clean. I fully realize that I'm about to ask how to time the market. But surely there must be conventional wisdom here.
My wife and I bought our house in 2005 with 10% down, 80% mortgage and
10% home equity loan. The mortgage is 30-year at 5.375% and the home equity loan is 20-year at 6.125% (but with somewhat unusual amortization). All things considered, this is a pretty good situation. However, I can't help but notice that interest rates for 15-year mortgages are flirting with 5% and they look like they're headed lower.So I worked up a spreadsheet assuming some current rates from Navy Federal (4.625% interest rate with $10K in closing costs). It looks like we can break even in less than 3 years which is pretty good. But I can't shake the feeling that, if we just wait a few more months, we can get an even better deal. At this point, it appears all but certain that the Federal Reserve will cut interest rates at the end of the month. That doesn't directly affect mortgage rates, but I think they're somewhat correlated.
This leads to the question: When do you pull the trigger? Honestly, I'd be content with the current rates. We'll definitely be in the house for 3 more years so that's not an issue. But I don't want to be kicking myself 6 months down the road if rates have dropped another
1/2%. Are there signs to look for that rates have bottomed out? I'd appreciate any advice you can offer me.Thanks in advance, Bill Woessner