ECONOMISTS: NOW'S THE TIME TO REFINANCE.

Byline: GREGORY J. WILCOX

A refinance window of opportunity has opened and it should be good news for anyone holding one of those adjustable time bombs of a mortgage.

Some say that rate is going to adjust and the payment will explode.

A chance to mitigate that financial damage arrived last week in interest rate surveys from two sources, which offer some hope.

Freddie Mac reported on Thursday that the rate on a 30-year home loan fell to a seven-month low, dipping to 6.30 percent from 6.31 percent the week before.

On Wednesday, the Mortgage Bankers Association had even better news. Its survey had the 30-year rate at 6.25 percent, up from 6.18percent.

So is this a good time to refi?

``Absolutely. This month is a good time to look,'' said Keith T. Gumbinger, vice president of rate tracker HSH Associates in Pomptom Plains, N.J.

Holders of adjustable rate loans may have also bought some time, too, because Gumbinger thinks this environment could persist for a while.

That's because the Federal Reserve Board, after 17 consecutive rate hikes dating back to the middle of 2004, has indicated it might be ready to stop.

``Rates have eased up because the market has decided the Fed and the economy are working in sync to make sure inflation does not become a problem,'' Gumbinger said.

And money can be saved, according to the following scenario worked out by Philip E. Lipp, president of AllWest Mortgage in North Hollywood:

We'll start in June 2004, the month that the Fed started cranking up rates, which had fell to near, if not historic, lows.

In June of that year, the median price of a previously owned single-family house in the San Fernando Valley hit a then-record $505,000.

One popular loan product, especially with prices that high, was a hybrid adjustable. One such product had a low fixed rate for three years and then adjusted.

The rate then was 4.80 percent and assuming a 10percent down payment the monthly mortgage was $2,383, according to Lipp's calculation.

When adjustables adjust they are capped at a minimum of 2percent and higher, depending on the product.

If the going rate matched last week's Freddic Mac rate, the interest would jump to 6.8percent and the payment would increase to $2,963.

Refinance the loan balance with an interest rate similar to last week's and the payment drops to $2,724.

It's a savings of $239 a month.

``You might want to take a shot at it,'' Lipp said of refinancing.

Some homeowners already are.

Refis increased 17.5 percent last week from the prior week, according to the Mortgage Bankers Association.

``Refinance applications continue to increase as mortgage rates have declined to their lowest levels since the beginning of the year,'' Mike Fratantoni, MBA's senior director, single-family research and economics, said in a statement.

Whether it's the right time to refinance is an individual situation.

But a little homework can be a money-saving exercise.

Interest rates in various parts of the country can be found at www.hsh.com. The site also features a payment calculator.

greg.wilcox(at)dailynews.com

[phone]