Sunday, August 18, 2002

What's the Buzz?

Cheap mortgages keep banks busy

        Tristate residents are getting a nice gift when buying homes or refinancing mortgages.

        That's because local mortgage rates have hit their lowest level in almost two decades, greatly increasing housing affordability for thousands of area consumers.

        The average rate on a 30-year, fixed-rate $100,000 mortgage last week came in at 6.34 percent, according to the Cincinnati Area Board of Realtors. That's the lowest the rate has reached since the local trade group began tracking them in 1985.

        The last time the 30-year rate came close to that level was when it hit 6.70 percent last September, during another strong year for refinancing and home purchases.

        Local industry experts believe that the brisk activity will also cause the refinancing business to break last year's record, as consumers rush to lock in lower rates.

        Homebuyers and those refinancing can save big bucks by taking action. For instance, a person who secured a 30-year, $100,000 mortgage at last week's rate of 6.34 percent would have a monthly payment of $621.78, a savings of about $50 a month from a year ago.

        Moreover, rates on 15-year mortgages have dropped below the 6 percent mark. That average rate in Cincinnati was 5.85 percent, making those rates highly attractive.

        The tumbling rates have left many home-lenders scrambling, causing some to boost staffs, assign people to work overtime and shift duties at their offices to meet the demand.

— Jeff McKinney



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- What's the Buzz?