Wait-and-see attitude may be best on refinancing
Question: My wife and I bought a second home two years ago. Because of its condition, it didn’t qualify for a conventional mortgage. We have a two-year balloon loan at 5.6 percent interest that comes due in April 2006. We will owe the entire principal in April unless we refinance.
Our banker suggests we follow this loan through its course and refinance next April.
Answer: Your banker sounds like a smart guy. Interest rates have risen slightly, but they probably won’t go up by much before April, so your upward risk is somewhat limited.