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Let's stay with mortgage rates. They have come down substantially in the last few months and now that the Federal Reserve has cut interest rates by 50 basis points, those on the sidelines of the housing market are hoping that they drop even further. And homeowners who bought at 7 to 8% interest rates, they might be wondering if it's time to refinance for a lower monthly payment. Joining me now, we've got Nina Gadwani, who is the head of refinance and home equity over at Chase Home Lending. Great to have you here in studio with us. Thanks for joining for the conversation. So, let's start there. Is now the time for people who are sitting on seven and 8% rates to refinance, now that we're starting to see a rate cutting cycle initiate?

Yes, absolutely, it's a good time for those customers to consider getting a lower rate. And so we see today if if rates go down below 6%, about 4.7 million customers would become in the money for a refinance opportunity. And that's a significant amount of customers who may have bought a home in the last two or three years and are sitting on that higher rate, as you said, and could take advantage of a lower payment. And so at Chase, what we've done actually just last week for a limited time only is we've improved our refinance pricing nationally so that we're able to help customers really take advantage of this opportunity to get a lower payment or take cash out and consolidate some of their debt.

We we often talk about this lock-in effect for people who had gotten pretty good rates and perhaps are well below that 7 to 8% rate. So, at what point do you really think we will need to see rates trickle lower to to really kind of break up that lock-in effect or at least the mindset around it?

Yeah, I think today, uh, we see about 70% of mortgage debt outstanding is less than sitting at less than 4% rate. And so you that lock-in effect you talk about is customers with a very low rate, maybe an ultra-low rate, um, and and they don't want to trade that rate in for something higher. As we've seen rates come down just as we have in the last year, particularly the last few weeks, um, I think that those higher rates will will converge down. Customers will start to be willing to, uh, you know, purchase a home and and be willing to take on a higher rate. And people have to move, they have to sell their home and they have to do other things in their life. Um, so I think it's a great time for for customers to start to do that.

When you think about what's already priced into mortgage rates right now, I mean, how much of the rate cutting cycle is already priced into mortgage rates at this juncture?

Uh, it's a great question and I think Claire also said the same thing earlier is um, you know, when uh when when the Fed announced yesterday and they outlined their long-term strategy, uh, it's interesting the mortgage market uh didn't display very much volatility. Uh, we see the mortgage market is fairly neutral. And so that tells us that in some ways, some of this change is already priced in, as you said, to mortgage rates. Um, so, but what I would say to consumers out there is that, um, you know, don't try to time the market. Uh, don't try to, you know, it's impossible to do that. It's it's very difficult to control that. What you can do is talk to a mortgage professional. And we have, uh, home lending advisors across the country at Chase who can help you figure out if now is the right time for you to consider taking advantage of the rates that are out there today.

I mean, the mortgage environment, it's a combination of several factors, but the thought process and consideration for buyers is existing home, new home build out. Are we seeing any major difference in the types of rates that people are getting based upon whether it's a new home that they're going in to purchase or an existing home where they already know there might be a little bit more of the hidden costs that they have to take on to when they are purchasing.

Yeah, no, I think that, you know, again, customers have a lot of options now that rates are coming down. And it really depends on what your your circumstances are. I would say the most important thing to do is to get educated about the process, to get educated about those fees, to understand what the mortgage process entails. Uh, whether that means you're looking to buy a home or you're looking to refinance, um, talk to a mortgage professional, understand what your options are, um, and really try to get educated about the process.

What do you think homeowners need to know about their home equity right now? Uh, given we were just talking about home prices being at all-time highs. What do homeowners need to already know about what their equity and where where that equity stands at?

Yeah, it's a great question, Brad, and as you said, home prices have been elevated for some time. Customers have also been staying in their home for much longer. Uh, and so that means they are sitting on more equity. And with mortgage rates the lowest that they've been basically all year, it is a very good time for customers to consider taking that equity and getting a cash out, um, consolidating some of their higher interest debt, like their credit card or auto loan debt, um, you know, reducing their overall credit profile. It is a very good time also for customers to think about getting a HELOC and using that home equity to their advantage.

Yes, absolutely. Home equity line of credit as well for all of those who are new to wealth here, as we've broken it down in the past. Nina, thank you so much for taking the time here and joining us here on set. Nina Gadwani, who is the head of refinance and home equity at Chase Home Lending.