Warren Buffets Thinks Now Is The Time To Refinance Your Home
"This is a very good time to borrow money, which means it may not be such a great time to lend money, but it’s good for the country that it’s a good time to borrow money," billionaire Buffett said.
As a reaction to the coronavirus pandemic, the Federal Reserve in mid-March slashed a key interest rate nearly to zero and signaled they'd keep rates at next to nothing until 2024.
Buffet has taken advantage, Berkshire said that it would be taking on the equivalent of over $1.8 billion in debt at rates ranging from 2% to just 0.674%.
"If you’re wrong and rates go to 2%, which I don’t think they will, you pay it off," he said at the time. "It’s a one-way renegotiation. It is an incredibly attractive instrument for the homeowner and you’ve got a one-way bet."
"With many homeowners still facing economic and employment uncertainty, these refinance opportunities will allow them to save money on their monthly payments, which can then be used to help other areas of their budgets," says Joel Kan, the trade group's vice president of forecasting.
At current rates an estimated 19.3 million homeowners are sitting on loans they could refinance to cut their monthly costs by an average $299, the mortgage data firm Black Knight has said.
Warren Buffett says it's a good time to borrow money, maybe you should listen.