Schiff got it right... and why it's foolish to keep waiting to refinance!

Nov 2006 Peter Schiff Mortgage Bankers Speech Part 5 of 8
Interest rates may drop, but if values drop as well, refinancing will become difficult...

Schiff mentions a pendulum swing on prices of real estate, etc. I'm probably at risk at saying this publicly and on record, but I'm afraid we're still not on the other side of the pendulum swing. IF you've been waiting to refinance thinking rates will drop even lower, you're foolish. 2009 will see even lower values; probably another 9-13% drop in home values.

My point is, you can wait to get to 4.5% interest rates to refinance, but you will almost certainly have a home that's worth less in value. So, unless you had 10% or more in equity 2 years ago when you bought, you won't be refinancing to 4.5% or 5% or any rate this year. I guarantee it...

Great time to be a buyer, though, because of the low, discounted prices on homes. Investors (smart ones) will just get richer. One client bought home to live in ($244k listed, bought at $190k) but decided to rent out with renters waiting to move in, deposit and year lease signed. With 4.75% on loan, 20% down, can you say cash flow?? :-)

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