March 15, 2009

CORRECTING THE FED'S MISTAKE:

Refinancing Boom Under Way (Chris Fleisher, 3/15/09, Valley News)

Home sales in the Upper Valley may have slowed, but local lenders have their hands full with another part of their business: refinancing.

“It's been very busy,” said Ginny Eames, a mortgage loan officer with Chittenden Bank in Woodstock. “We're probably doing at least two to three times the normal volume.”

“We've seen a dramatic increase over the last three months,” said Sharon Whitaker of Lake Sunapee Bank.

Thirty-year mortgage rates that have hovered around a historically low 5 percent in recent weeks and have convinced homeowners that now might be a good time to refinance.

Refinancing -- taking out a new loan to cover an existing one -- has seen a surge of activity in recent months, according to the Mortgage Bankers Association. The MBA's refinance index, which measures activity, was up 19 percent at the end of February over the same time last year. And the refinance share of mortgage activity is now about two-thirds of all mortgage activity nationwide.

It is the biggest refinancing boom that Eames has seen in her 29 years of banking. While it doesn't make sense for everybody, Eames said, a lot of people should be considering refinancing if they aren't already.

“Anybody's whose interest rate is 6 percent or above should be looking at doing it,” she said.


For instance, we moved (three houses down the street) this Summer, right at the point where the Feds inflation hysteria had pushed rates that absurdly high, so we refinanced half a year later and have lower payments on a 20 year mortgage than we did on a 30. The contrast explains how central banks precipitated the credit crisis because they didn't understand gas prices.

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Posted by Orrin Judd at March 15, 2009 8:54 AM
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