Rejoicing Over Mortgage Rates

Axelrod_mortgage rates_Gino Cotignola CBS

Here's something you don't see every day: a thriving dot-com business where empty desks are for hiring, not from firing.

"Our business has grown every month, two and three times the previous month. It's going really well," said lowestloan.com's Dan Harris.

So what are they selling? Mortgages. At lowestloan.com, a particular kind of mortgage has become their bread and butter. "Refinances are 80 percent of our phone calls," said Harris.

Mortgage Rates Across The Country
Click here to look at mortgage rates in cities across the country.

Click here to look at the average national monthly mortgage rate for the entire year of 2000 and for January of 2001.
The economic slowdown has caused lenders to steadily lower mortgage rates since May, so low right now it's triggered the biggest refinancing run in the last three years.

Geno Catignola and his wife Kim logged on and did the math. He said it was a no brainer. "Well, basically I cut my mortgage payment by $200 a month and I cut my term by 10 years," he said.

Over the life of the loan, they will save more than $87,000. "We're expecting a baby and I thought 'this is great,' " recalled Kim.

While homeowners across the country have been watching the Fed this week like hawks to lock in their best refinancing rates, they should keep this in mind: four out of the last six times the Fed has cut interest rates, mortgage rates have actually gone up within a month's time.

As analyst Keith Gumbinger sees it, if the Fed cuts are successful, the economy will pick up. Lenders won't need to keep rates as low to attract business.

"If the Fed is actively propping up the economy, or stepping on the gas if you will, to push the economy forward, mortgage interest rates might rise," cautioned Gumbinger.

Perhaps, but the folks at lowestloan.com are listening to a different fortune teller. They're doubling the staff in the next six weeks.


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  • CBSNews.com staff CBSNews.com staff

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