Alert to homeowners thinking of refinancing: Rates are rising

October 25, 1992|By Matt Carroll | Matt Carroll,Boston Globe

Most lenders have a message for homeowners who have put off refinancing their mortgage: Interest rates have already hit bottom and are on their way up, at least for now.

Rates have climbed up over 8 percent during the past week, and are up about a half a percentage point over the past two weeks.

Most lenders are offering fixed rate 30-year mortgages with interest rates of about 8.3 percent and charging two points. Points are fees a lender charges to handle a loan. One point is equal to 1 percent of the loan amount.

Lenders speculate that the rise comes from the increasingly likely prospect that Gov. Bill Clinton will be elected president Nov. 3. The idea of a Democratic president is "throwing jitters through the bond market," said Keith T. Gumbinger, a spokesman for HSH Associates of New Jersey, which tracks mortgage rates.

Nationally, rates on 30-year fixed-rate mortgages in the last week have gone from an average of 8.15 percent to 8.30 percent Wednesday, he said. The low was on Sept. 11, when rates hit 7.82 percent.

William F. Mullin, president of Cambridgeport Mortgage, said Wall Street was nervous that a Democrat in the Oval Office might mean higher taxes and higher inflation, leading to higher interest rates.

But he also thought the economy had improved some, which pushes rates up, too. The Cambridgeport rate for a 30-year fixed mortgage, with two points, was 8.375 percent, up from 7.99 Friday.

Lenders split on whether they thought rates would continue a slow rise or would settle back down after Election Day.

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