Newspaper article The Florida Times Union

Mortgage Refinancing a Hot Topic

Newspaper article The Florida Times Union

Mortgage Refinancing a Hot Topic

Article excerpt

Byline: Earl Daniels, Times-Union business writer

On a file cabinet at Home South Mortgage in Jacksonville, the number 6.75 is displayed.

Homeowners whose applications are stored in the cabinet wait for the interest rate to drop to 6.75 percent before they give Home South officials the go-ahead to refinance their home loans.

"That seems to be the magic number most people are waiting for," said Jim Delvecchio, president of Home South Mortgage. "We are stockpiling their applications until that point."

His company and other mortgage lenders in Jacksonville are getting a slew of inquiries from homeowners who want to refinance their home loans. As rates drop, helped by a sluggish economy, homeowners find themselves faced with a decision: refinance now or wait for lower rates.

The number of refinancings is approaching 1998 levels, a time when rates were similarly low. In April 1998, the interest rate for a 30-year fixed mortgage was 7.14 percent.

This week, the 30-year fixed rate averaged 7.04 percent, compared with 7.01 percent last week. Last year at this time, the 30-year fixed rate was 8.12 percent, according to Freddie Mac, the government-chartered company that buys and sells mortgages and makes funds available to lenders.

During the first quarter of 1998, 53 percent of all mortgages issued were refinanced mortgages, totalling $301 billion, according to the Mortgage Bankers Association of America in Washington.

The association estimates that 50 percent of mortgages in the first quarter of 2001 -- about $348 billion -- will come from home refinancing.

The historic rule of thumb is homeowners should refinance if the present mortgage rate is 2 percentage points lower than that on their current mortgage.

"If they think it might work for them, then it is best for the homeowner to inquire about it," said Tom Morcom, vice president of the Jacksonville chapter of Florida Association of Mortgage Brokers. …

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