Ramsey Show Host Jade Warshaw Says 'Wait Until After The Election To Refinance Your Home,' This Isn't The Last Rate Drop

With the Federal Reserve's recent rate cuts, many homeowners are wondering if now is the time to refinance. After all, this decision has lowered mortgage rates to the lowest level in about two years, making them much more tempting if you're locked into a higher rate. But, according to personal finance expert and Ramsey Show co-host Jade Warshaw, the wait could be worth it.

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In a recent guest appearance on Fox Business, Warshaw discussed the recent rate cuts and their implications for personal debt, from credit cards to mortgages. While rate cuts could prompt some to go deeper into debt by taking out loans or credit at lower rates, Warshaw said the only consumers benefiting from this right now are those who are in the market to buy a home.

Along those same lines of thinking, Warshaw warned those thinking about refinancing their homes to wait a moment. “If you bought at the highest rates, right now you're eager to refinance,” he told Fox Business. “But I think it's worth the wait.”

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He said those who want to refinance don't necessarily have to wait long, but it would be wise to wait until after the election to see where all the chips fall. He also addressed the fact that refinancing is expensive.

According to Bankrate, refinancing a mortgage can cost between two and five percent of the new loan. For a loan of $244,498 (the average American mortgage debt), the amount ranges from $4,800 to $12,225. And that's just on average. Costs may also be associated with refinance application, origination and home appraisal fees.

The Federal Reserve's recent rate cut was the first since March 2020, with more reductions expected through 2025. According to Freddie Mac, the average 30-year fixed mortgage rate recently fell to 6.08%, the lowest in two years. However, predictions suggest rates could fall further, potentially reaching the mid-5% range by the end of the year.

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Interest rates could be further affected by the upcoming elections. According to Warshaw, election cycles can influence economic policy and interest rates, so it's smart to make big financial decisions, like refinancing, after the election.

It's also worth noting that while the Federal Reserve's rate cuts have led to slightly lower mortgage rates, other credit products like credit cards and auto loans have not seen the same level of relief. The reduction in credit card APRs has been minimal and has offered only modest savings to consumers. Therefore, while mortgage refinancing may become more favorable in the coming months, it is important not to overextend yourself and take on new debt in other areas.

If you're considering refinancing or buying a home, keep an eye on the market, especially as more rate cuts are expected. By staying informed and patient, you can ensure a better financial future with lower rates and fewer expenses.

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