Black Enterprise - Cash in on low mortgage rates - good time to refinanceB.E. helps you find the best deals around
The interest rate environment continues to be favorable for mortgage borrowers. Thanks to the Fed and low inflation, interest rates have been held down: The average 30-year fixed rate is 6.83%. And there are no signs that such rates will significantly rise or fall in the near term.
This is the best time to refinance. Consider shortening the term of your loan from, say, a 30-year fixed-rate to a 15-year fixed-rate mortgage. Moreover, take advantage of lower rates to ease your burden through debt consolidation--car and installment loans as well as credit cards.
Just how low should rates be for you to consider refinancing? If it's a percentage point or more lower than what you have. Also, you've struck a great deal if you're able to recoup refinance charges within 14 months.
James R. DeBoth, president of Mortgage Market Information Services Inc. (MMIS) in Villa Park, Illinois, says that when shopping for a mortgage you should probably follow the five guidelines below:
* Talk to a real estate agent or broker. Lenders regularly call agents to alert them to new financing arrangements and packages.
* Look for rate surveys published in your local newspaper. Many papers provide brief tables on interest rates and mortgage availability.
* Shop for quotes by telephone. Check out the Yellow Pages under mortgages. Call at least five to 10 different lenders for rates and terms on fixed- and adjustable-rate loans.
* Try computerized mortgage shopping and online services. Many of these services have local lenders on their listings. Two such Internet services, LendingTree (www.lendingtree.com) and MMIS's site (www.interest.com), match online shoppers with banks and finance companies based on their credit history and income.
* Evaluate the annual percentage rate. This figure includes discount points and other charges and spreads over the life of the loan. It indicates the effective rate of interest paid per year.
Since mortgage rates fluctuate, lock in the mortgage rate you are quoted if your closing will take place within 20 to 60 days (common lock-in periods range from 30 to 90 days). Should you opt to float your mortgage rate, be sure to keep tabs on interest rate movement, particularly that of Treasuries. The yields on one-, three- and five-year Treasuries can be good gauges of the introductory rate on adjustable-rate mortgage (ARM) loans.
The Best 30-Year Fixed-Rate Mortgages in the Top Metros
Down
City Lender Name Rate Payment
New York Blue Star Mortgage 6.375% 5%
Los Angeles Estate Mortgage Corp. 6.375 5
Chicago LaSalle Home Mortgage Co. 6.25 5
Newark Chelsea Financial Services 6.375 5
Philadelphia Trident Mortgage Co. 6.25 5
Detroit Group One Mortgage Corp. 6.5 5
Washington, D.C. Crestar Mortgage Corp. 6.5 5
Dallas Fort Worth Mortgage Corp. 6.63 10
San Francisco Citibank, FSB 6.38 20
Houston Norwest Mortgage Inc. 6.5 5
Miami Home Financing Center Inc. 6.5 3
Boston HomeVest Mortgage Co. 6.25 5
Atlanta Premier Lending 6.375 5
San Diego Countrywide Home Loans Inc. 6.5 5
Minneapolis Irwin Mortgage Corp. 6.625 5
St. Louis Countrywide Home Loans Inc. 6.875 5
Baltimore Branch Banking & Trust 6.375 5
Pittsburgh National City Bank 6.25 5
Phoenix Hart West Financial Inc. 6.75 5
Tampa Capital Mortgage Systems 6.625 5
City Points Telephone
New York 2 516-921-6666
Los Angeles 1.50 714-832-3800
Chicago 2.625 800-510-6895
Newark 2 201-342-6594
Philadelphia 3 610-889-7600
Detroit 2 734-953-4000
Washington, D.C. 2 301-762-2972
Dallas 1 972-233-3722
San Francisco 2.125 510-530-5660
Houston 2 281-679-3500
Miami 2 305-661-4663
Boston 2 617-965-4663
Atlanta 2 770-939-1060
San Diego 2 800-877-5626
Minneapolis 1 612-898-41D0
St. Louis 0 314-379-0270
Baltimore 2 301-596-7880
Pittsburgh 2.75 412-322-8601
Phoenix 0 602-263-1212
Tampa 0 813-261-5119Source: HSH Associates (www.hsh.com)
Data as of 2/12/99. Rates are subject to change without notice.
