The New Boom In Refinancing

With 30-year mortgage rates falling under 6 percent for the first time in about three years, homeowners are seeking to refinance in droves. There are reports that refinancing at the current rate would offer savings to 37 percent of homeowners, and the percentage likely will rise if the weakening economy drives down mortgage rates even further in the coming weeks.

Mortgage demand hit a four-year high during the week ended Jan. 11, with approximately 67 percent of applications classified as refinances, according to the Mortgage Bankers Association. However, it remains to be seen how many of these applications are turned away, as experts say the only beneficiaries of this refinancing boom will be borrowers with conforming loans (417,000 or less), good credit and plenty of equity.

Borrowers with jumbo loans are not seeing any rate drops, and those with poor credit or properties that have depreciated in value simply do not qualify under today's stricter underwriting standards. The best rates are being offered to borrowers with more than 30-percent equity and credit scores topping 679.