Low mortgage interest rates prompt refinancing rush

FLINT (WJRT) -- (01/13/09) -- The inauguration is one week away, and with that comes hope for an improved economy.

Home mortgage rates have dropped to a six-year low, and the race is on to refinance.

Picking the perfect moment to lock in a great rate is the key.

Financial experts say they've seen it before: A new face in the White House brings new hope for an improved housing market.

"It's a golden opportunity for everybody," said Amanda Crews from Metro Housing.

For several weeks now, plummeting mortgage rates have motivated thousands to refinance their home loans. Conventional rates are dipping below five percent.

"People in the business are looking at this and saying, 'oh my God. It's an opportunity to make money, just by making choices, and it's an opportunity you won't repeat again,'" Crews said.

The question is, when is the right time?  "If you can get 1 percent lower on a $50,000, you'll save $1,000 a year.  That's $100 a month almost."

Metro Housing Partnership of Flint is a non-profit agency. They say refinancing with these new, low rates could be the solution for homeowners with little or no equity and even those facing foreclosure.

"The lender is a business. They want their money back and you want to live in the house. What can we do? How can we make this meet? It's a strategic thing."

Metro Housing recommends refinancing through an FHA Streamline loan. The rates are a little higher, but the fees are lower, and you don't need to reappraise your home.

"FHA is the best and safest way for you to deal, because it has a government oversight. FHA requires and mandates that the government works with you if you ever get in a problem."

With interest rates falling at such a rapid pace, there's always the temptation to wait it out and see how low they'll actually go, but mortgage specialists warn that type of gamble could end up costing you in the long run.

"I don't expect it to drop lower than 4.7 percent. Your loan officer will hover and then lock it. You don't want to miss it."

Metro Housing holds a free mortgage and foreclosure seminar every Friday night at 5:30.

On the Web:

http://www.metrohousing.org/about.html

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local, marc jacobson

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