Refinancing based on interest rates

[Dav Pohote]

Today the Fed said they would debate having 3 rate cuts this year, which can add up to .75-1 basis point. 

On the 15 yr fixed mortgage's I use, that comes out to about $250/month in interest payments, or $3,000/year. 

My question is if I see a property I really like now, how easy would it be to refinance in Q1 2025? What does the bank look at? I've never refinanced but hear alot about it. Wouldn't everyone who got in at higher rates do the same thing when rates go down and overflood the banks with work? 

[Tarik Turner]

It really depends on the loan type that you are in initially. Most 30 year mortgages come with a prepay penalty that you would be responsible for if refinancing within the first 5 years.

The other option would be to purchase a property with some value add, spend the year rehabbing the property and then refinance out into a long term loan after the work is completed and rates have fallen. Short term loans typically do not come with a prepayment penalty and you would end up with the property rented at a better interest rate and could possibly pull out some equity.
Remember-Trying to predict future rates can be a risky move -you never really know where things will land