According to the Mortgage Bankers Association, we are now in the throes of more mortgage refinancing than ever in the history of this country. It is at an all time high, they say, and the consequences of such a deluge of applicants is being felt all over. Besides giving the lending institutions an overwhelming amount of paperwork, appraisers, title companies, surveyors and the like are feeling the brunt of all this "new business."

Why? If you ask the mortgage brokers out there, they will tell you that rates are now at 40 year lows. In fact, 30-year loans can be had for under 6%. A tenth of a percentage point alteration in the interest on say a $170,000 loan spread out over 30 years can mean quite a difference in monthly payments. Take a 7% rate for 30 years on a $170,000 loan and drop that rate one full point to 6% for the same 30 years and you will see a savings of some $300 a month.

Many financial institutions are working overtime to process such requests and approvals are being given, in many instances, almost instaneously.

One factor that plays a pretty good role here is that borrowers are looking for refinancing as interest rates drop so rapidly because of the availability of "no cost" loans. One broker tells me that he has borrowers who have refinanced six times in two years because they have programs in place where the lender pays for everything to refinance. In fact, one broker says that he has been doing some 15 closings a day recently. Of course, this will only continue as long as the economy remains mired in mud.

Last week, Freddie Mac, the mortgage company, released a report that said the average interest rate for them on a 30-year fixed-rate mortgage fell to the lowest level in 32 years of record keeping. Taking this even further, rates for 15-year fixed-rate mortgages fell to 5.47% last week, another new low while one-year adjustable-rate mortgages was at 4.28%.

Why are rates dropping like stones in the water? We have a rather sluggish economic recovery system combined with a turbulent stock market and that has been sending investors to the bond market line. This helps keep those long-term rates down. Frank Nothaft, Freddie Mac's chief economist, says "Adding to the decline in long-term rates is a flight to quality in the bond market from nervous investors worried about falling stock prices and the possibility of war in the Middle East."

There are many who say we haven't even reached the floor as yet. For example, James Nutter, Jr. of James B. Nutter Mortgage in Kansas City, Mo., says that he believes the 30-year rate will drop to 5.6% and the 15-year rate to below 5%.

Bottom line? Look at the numbers carefully. There are plenty of mortgage calculators on the Internet that will compare numbers at different rates. If you aren't making money with your stock portfolio, consider doing something with real estate. But don't wait too long.

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