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There's no better time to refinance your mortgage.

1997 was undeniably a pivotal year for the mortgage industry. With the mortgage refinancing trend now sweeping the nation, interest rates at a five-year low and capital availability at an all time high, the residential real estate market is flourishing.

Compared to the first major real estate boom in the early 1980's, when 30-year fixed rates were at 18.75 percent, today's mortgage market is booming--with rates at a low 7 percent.

The benefits of refinancing existing mortgages are numerous, as the market or the time could not be better. Whether it be to save money by reducing monthly payments, to shorten the term of a mortgage or to increase the liquidity of an asset, now is the time to refinance.

With property values and home equity soaring, homeowners who could not refinance during the recession of the early 1990's because of significantly decreased asset values and unfavorable interest rates are now rushing to refinance. Many of the country's baby boomers, who are now hitting their 50's, are opting to shorten their mortgage terms from a 30-year fixed-rate mortgage to a 15-year mortgage, allowing them to be mortgage-free by the age of 65 to enjoy their retirement years.

For the Generation X group of homeowners, refinancing provides an opportunity to save additional capital for their children's college educations, buy a second home or renovate their existing home. And for those homeowners with a 1-year adjustable mortgage rate, refinancing offers a chance to benefit from the low, longer term interest rates. In a mortgage market as healthy as the present one, refinancing proves beneficial to those who take advantage of the prime rates.

Real estate owners who once lacked enough equity to refinance, coupled with the strict lending criteria of the banks of the earlier Nineties, are faced with a win-win situation today. Not only have rates gone, down but there has been appreciation in the value of the apartments over the past three years.

The savvy homeowner and buyer have the advantage to gain from today's hot market. Refinancing now will yield greater benefits later.
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Title Annotation:Focus on: Banking & Finance
Author:Bitton, Ellen
Publication:Real Estate Weekly
Date:Feb 18, 1998
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