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Refinancing Boom Over In The Us

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By Robert Evatt, Tulsa World, Okla.

Feb. 19--Viewed one way, the rush to refinance is over. After more than three years of low interest rates, few people are changing their home mortgages to take advantage of a better rate. "The only people who are going to do that have already done that," said Juliana James-Thomas, executive vice president and general manager of Cutec Cos. "That pool has been fished."

That's not to say mortgages aren't being revamped. On the contrary, mortgage brokers say they're still busy working with people who want to cash in their equity or adapt their loan to a variety of life changes. Gaylin Haynes, vice president of BOk Mortgage, recalled that when rates were lower, her company experienced a rush of people looking to refinance. "When the rates are below 6 and a quarter, we see a lot of activity," she said. But few people are looking for a better rate now. "Just in the last couple of months, we've seen a drastic decline," Haynes said. Nationally, applications to buy homes and refinance mortgages dropped 7.3 percent last week, according to the Mortgage Bankers Association, though it's unclear how much of that drop can be directly attributed to refinancing. The nation's benchmark mortgage rate has edged higher for four straight weeks, rising to its highest level in two months. Last week the average 30-year, fixed-rate home loan was going for 6.28 percent, up from 6.24 percent the previous week, government-affiliated mortgage giant Freddie Mac reported Thursday. A year ago, 30-year mortgages averaged 5.62 percent. Haynes said the long period of relatively low rates, combined with the creeping increase over the last few months, has made many people believe that the time to refinance is over. But Jana Warren, owner of Cimarron Valley Mortgage Inc., said refinancing remains potentially beneficial to many people. "The rates are still very good for refinancing, and still considerably lower than where we were before 2001," she said. Cimarron Valley hasn't experienced a significant drop in rate-motivated refinancing, she said. And even in offices where activity has fallen, new customers continue to come in for refinancing. Haynes said some people were unable to refinance when interest rates first dropped. "There are always some individuals who miss the window because of credit issues or job situations," she said. The majority of brokers' refinancing business is now centered on cashing out equity or adjusting a mortgage to major life changes. Cutec's James-Thomas said demand for these types of refinancing has remained steady in recent years, even as rate-based refinancing has waxed and waned. Sometimes, mortgages are restructured when individuals get married or divorced, change jobs or get laid off. But for the most part, mortgage holders who refinance are looking for some quick funds. "Some do so to pay for home improvements, and some cash out for college tuition," Haynes said. James-Thomas said other clients may need help getting through an emergency. James-Thomas said she sometimes advises clients not to refinance, especially after seeing customers choose shorter loans with higher monthly payments shortly before being laid off. "I would rather people not have a 15-year loan and pay a little bit more over the life of the loan than to get themselves into a tough situation," she said. ------------


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  • 302 Brexit, House prices and Summer 2020

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      • down 5% +
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