MONEY MATTERS: Iowans rush to refinance as mortgage rates fall - KWWL - Eastern Iowa Breaking News, Weather, Closings

MONEY MATTERS: Iowans rush to refinance as mortgage rates fall

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by John Wilmer

WAVERLY (KWWL) - The Mortgage Bankers Association says the number of mortgage applications surged by a record number last week. This is encouraging news, as the federal government lowers mortgage interest rates to 5.4 percent, the lowest point since 2005.

While the winter is not the best time in Iowa to sell your home,  it might be the best time to refinance. The Mortgage Bankers Association said it's refinance index, which measure refinancing activity, tripled to 3,802.8 last week from the week before. The index was also 37.7 percent higher than the same week a year ago.  It was the largest increase in refinance applications in the survey's 18 year history.

Randy Lee of Open Mortgage in Waverly says he has received 14 refinancing applications just this week.

"Not everybody is in a situation where they probably should refinance if the rate is not at least a point or over a point. It possibly is not going to make sense to just do the refinance," Lee said.

While a point or a point and half doesn't sound like much it could end up saving you thousands of dollars over the lifetime of the loan.

"Even at a point, an individual that can afford to, can move from a 30 to a 15 year loan by taking that decrease in that interest rate. In one example, it was over $80,000 and paid off in 15 years instead of 30," said Lee.

As for how low the rate will go and for how long no one knows, but experts say it never hurts to try and find a lower rate.

According to mortgage experts, 12-million households across the country are not eligible to refinance because their mortgages exceed the value of their home.

Online Reporter: John Wilmer

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