Time to Refinance? Millionaires say no!

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Time to Refinance? Millionaires say no!

The financial markets remain under considerable stress, and credit has tightened further for some businesses and households.

Moreover, recent information indicates a deepening of the housing contraction as well as some softening in labor markets. On January 30^th, 2008 the Fed dropped its lending rate to banks, again, hoping to shore up the economy and stimulate business expansion and consumer spending. Previously, on January 22^nd, the fed slashed the key rate 3.5% which was the biggest rate cut since October 1984.

Despite this and previous interest rate cuts, when asked “Given the present state of the economy and interest rate, do you feel now is a good time to refinance?”, 65% of the wealthy polled said no. The financial markets remain under considerable stress, with credit tightening further for businesses and households without prime ratings. Considering that low rates are usually a starting pistol for refinancing, most of the wealthy (who have prime credit ratings) may not be considering a refinance. Perhaps all the factors that have a bearing on the economy including the credit crunch, upcoming elections, and the ongoing war in Iraq have signaled to wealthy Americans that now is not the time to act but rather to sit tight, and wait and see.