Lower interest rates are prompting an increase in home sales and mortgage refinancing in Mower County.

Monday, June 11, 2001

Lower interest rates are prompting an increase in home sales and mortgage refinancing in Mower County.

Since the beginning of this year, the Federal Reserve has cut interest rates by a half of a percentage point each month.

"I think it makes a lot of sense for people to look at refinancing their homes," Lynn Koch of Austin Mortgage Services said.

For example, an $80,000 home with a 30-year mortgage at 7 percent interest rate would cost $529.15 a month.

Rates for a 30-year mortgage at Home Federal Savings Bank were at 7.25 percent as of last week, Barb Meyer of the mortgage department said. A 15-year mortgage has about a 6 percent rate. Rates change daily.

Many people are taking advantage of a 15-year fixed rate, Meyer said.

"For refinancing, it’s a busy, busy time," Meyer said. "Much busier than it was a year ago."

Interest rates at Austin Mortgage are "attractive" Koch said, but because the rates change daily, he did not give specific numbers.

"We’re not going to put you into a product that isn’t beneficial," Koch said. "We’re concerned with the customer’s overall financial condition."

Real estate agents also have seen an increase in sales.

"A lot more people can qualify for a nicer home than they thought they could because of lower interest rates," George Moline of Moline Real Estate said.

Last year’s rates were at about 8 percent, but 7 percent "makes a big difference," Moline said.

People also are refinancing credit card and other debts. Those with equity in their homes can consolidate their debts under one fixed interest rate.

How long the interest rate will continue to drop depends on the economy.

"[Alan] Greenspan is trying to bolster the economy a little bit," Koch said. "As long as there seems to be weaknesses in the economy, the fed is more inclined to have lower rates."

Call Cari Quam at 434-2233 or e-mail her at newsroom@austindailyherald.com.