Homeowners refinance, put savings under mattress
Chicago-area mortgage broker Steve Molitor had knee replacement surgery a few weeks ago, purposely scheduling it around the holidays because it’s typically a slow time of year in his business. But as he and other can attest, it’s been anything but slow.
Since the Federal Reserve’s announcement during Thanksgiving week that it would invest $600 billion in mortgage-backed securities, mortgage rates haven’t exactly been in a free-fall but they’ve sure gotten attractive. The Mortgage Bankers Association on Wednesday said that for the week ended Dec. 12, the average interest rate on 30-year fixed-rate mortgages was 5.18 percent for loans carrying an 80 percent loan-to-value ratio.
It has led to a refinancing boom, but one that’s much different from those of years past, when everybody who stood in line for a lower rate got one and the savings generated turned into spending.