Is It Time to Refinance?

When you saw bank rates creep higher a few months ago you probably bit your lip. When the Fed then went on the offensive to raise interest rates last month your bit lip may have broken into a pout. Yes, your dreams of refinancing your home were toast. But have you taken a look at mortgage rates lately?

You don't need to pinch yourself. According to Bankrate.com (Nasdaq: RATE  ) rates haven't been this low since April. That's impressive on two counts.

As a stock investor, Bankrate.com's stock has been cut in half in that same timeframe. As a pure play on the once-hot refi market, it's peculiar to see the stock fall so quickly given the return of the low rates that fueled its popularity with readers and sponsors. There may be a buying opportunity there worth looking into.

As a homeowner, do you understand what happened here? The market has known that rates would be inching higher for a while now. It was only natural for the basis points to creep higher, months before the official hike followed suit. But now that it's a done deal, and even with expectations that the Fed's work has only just begun, it makes perfect sense for rates to ease as the lending sector exhales. It's not just stocks that sometimes follow the "buy on the rumor, sell on the news" adage.

For the companies that are relying on a healthy mortgage and refinance market to grow their business quickly such as Countrywide (NYSE: CFC  ) and homebuilders such as Lennar (NYSE: LEN  ) , D.R. Horton (NYSE: DHI  ) , and Pulte (NYSE: PHM  ) , it's important to note that the recent dip may very well be temporary. However, for homeowners, this lull might be the perfect excuse to lock into that low rate and either refinance your home or convert your variable rate mortgages into fixed alternatives.

Windows aren't forever. Just don't go telling Microsoft (Nasdaq: MSFT  ) I said that.

Is this going to be the last time to line up cheap home financing? Is this the time to take some of the equity out of your home and make those major improvements? How do you start the process? All this and more in the Building/Maintaining a Home discussion board. Only on Fool.com.

Longtime Fool contributor Rick Munarriz has refinanced his home twice in recent years. He probably won't try for a third. He does not own shares in any companies mentioned in this story.