The economic turmoil of 2008 has left few bright spots, but here's one: Mortgage rates have plummeted.
Rates on 30-year, fixed loans are hovering around 5 percent - the lowest level since Freddie Mac began tracking rates in 1971. Some economists predict a further slide in rates once Barack Obama becomes president and rolls out an economic rescue plan.
And that could mean thousands of dollars in savings for Maryland homeowners.
"The people who have done everything right are now going to benefit, and will be very well rewarded," said Mari Adam, a financial planner and owner of Adam Financial Associates Inc. in Boca Raton, Fla. "We are saying to our clients, anyone who can refinance should refinance. You can save a lot of money. People can make a real difference in their balance sheet."
As consumers struggle with rising costs or job instability, such attractive rates can offer much-needed relief on monthly payments. Other borrowers see an opportunity to pay off a mortgage sooner, or shed a risky adjustable rate and get the peace of mind that a fixed payment brings.
While rates have dropped most on so-called "conforming" 30-year fixed mortgages, rates have drifted down as well on 30-year jumbo loans of more than $417,000 and on adjustable-rate mortgages. Jumbo loan rates, however, are closer to 6.75 percent.
David Junkin of Timonium plans to refinance, not to save money on his mortgage payment but to guard against future increases in the adjustable rate on his home equity loan.
Junkin has a fixed rate of 4.5 percent on his 15-year mortgage. But he has an adjustable rate on his $118,000 home equity loan, which he has used to pay his children's college tuition. He fears that the federal bailout will trigger inflation, saddling him with a higher rate on his home equity loan.
So he plans to bundle the mortgage with his home equity loan and try for a fixed rate below 5 percent.
"It seems that the time is right ... and we have a good credit rating," said Junkin, an engineer who has owned his home since 1992.
Even as Junkin and others jump to refinance loans, some are holding out, hoping for even lower rates.
"The most asked question, the question of the century, is what will rates do?" said Neil Sweren, president of Allymac Mortgage Services in Owings Mills.
