Second Wave Of Refinancing Called Likely

NEW YORK - If you missed the boat when it came time to refinance your home mortgage with lower interest rates last winter, don't despair. Your ship has come in again.

Mortgage rates are now the lowest they've been in 19 years, averaging just under 8.25 percent on the popular 30-year fixed-rate conventional loan.

Fifteen-year rates are equally attractive, with a nationwide average of around 7.75 percent, and one-year adjustable rate mortgages (ARMs) remain firmly in 5 percent territory, says HSH Associates, a Butler, N.J., publisher of mortgage information.

Lenders already are reporting a jump in refinancing applications, although few expect a repeat of the refinancing rampage of earlier this year.

"The refinancing business was a huge boon in January and February. We're seeing a pickup on that in July," said Gregory Samp, president of Sibley Corp., a Rochester, N.Y., mortgage banker.

"The question is, are there that many people that didn't take advantage of those opportunities back in January and are coming around now?"

Although many homeowners managed to refinance earlier this year, others waited too long to apply or got caught in a backlog of paper work at lending offices, said Paul Havemann, an HSH Associates vice president.

Havemann said that after rates hit bottom last winter, they quickly headed back up. "There was a three-week window," he said.

Some economists predict rates would stay lower a bit longer this time around because the economic recovery has yet to take off.

The Federal Reserve ushered in the latest round of rate cuts on July 2 by cutting its discount rate - the interest charged on loans to member banks - to a 29-year low of 3 percent.

The half-percentage-point cut was intended to keep the economy from falling back into recession by encouraging more spending.

Consequently, mortgage rates have dropped to their lowest level since July 1973. "They're at the level even our parents would be jealous at," Havemann said.

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