READY TO REFINANCE?

With interest rates dropping, it might be time to refinance your home mortgage.

Federal Reserve Chairman Alan Greenspan says that with money getting cheaper homeowners might want to take a look at their mortgages and make sure it's the best possible loan for their situation.

The drop in interest rates over the past few months has spurred interest in home sales, with more than 4 million new homes to be sold in the United States this year.

But the big news in the mortgage marketplace is refinancing activity.

The Mortgage Bankers Association recently reported that 57 percent of all mortgage originations are refinancing.

That means that almost two-thirds -- double the normal amount -- of all mortgage transactions are refinancing deals.

Some lenders are seeing as much as 80 percent of their business in refinance packages.

Is this the time to refinance? It's the question many homeowners are seeking answers to.

But deciding if the time is right depends on a number of factors, especially the mortgage loan rates, said mortgage bankers. Some things to consider:

-- If the homeowner's loan range is more than 8 percent, it is time to take a look at the refinancing process.

-- If the rate is between 7 and 8 percent, the homeowner should evaluate the numbers.

-- If the mortgage rate is less than 7 percent, the homeowner might want to wait and see if the rates drop further.

Currently, the national average for loan rates were 6.68 percent for a 30-year fixed, 6.31 percent for a 15-year fixed, and 5.52 percent for a 1-year adjustable loan.

These rates will fluctuate from one area to another and for various price-range financing.

The old rule of thumb that says you should not refinance your mortgage unless the new rates were 2 percentage points lower than your old rate no longer holds true, said Wayne Nesslein of The Mortgage Center, a local mortgage office.

Nesslein said that concept emerged when loans were smaller, but with larger mortgages, in the range of $100,000 to $200,000 and more, homeowners might discover refinancing with lower rates can save them money.

People who expect to stay in their house might find a good chance to lock in on some of the lower rates. If owners plan to move within a couple of years, then they probably want to pass on refinancing.

Mortgage rates still vary, depending on the size of loan, but people can find 7.25 percent financing on $50,000 loans, and as low as 6.5 percent on loans of up to $200,000.

The loans are usually figured on 25 to 30 years.

"We noticed a big pickup in home refinancing over the past 90 to 120 days," said David Shell of Capaha Bank.

For the best savings on a loan, mortgage loan officials advise not looking at the lowest quote alone, but trying to find a product that best suits the homeowner.

If you're sure you'll move in five years, an adjustable rate loan might be best for savings. If you plan to stay put, however, officials say to "go long" because the 30-year loan allows borrowers the most flexibility.

A short answer to the "Where to shop for home refinancing?" question is simple: "Everywhere."

Shop local. Call local mortgage companies and banks. Every region has its own mortgage market.

Then, check the Internet for more research information. A recent look at the Internet revealed a number of Web sites, with educational materials, mortgage calculations and other valuable information.

Some companies broker loans from more than one source, and rates change daily. Monday's best-rate might not be the best rate on Tuesday, or Wednesday. And, just a few percentage points can make a big difference.

A case in point: During a recent week, the "average" interest rate went from a 30-year low of 6.49 percent to 6.90 percent. What this meant to a homeowner waiting to lock in on a $100,000, 30-year, fixed-rate mortgage was about $33 more a month or about $400 a year.

WHERE TO SHOP FOR REFINANCING

You can shop for the best rates almost everywhere -- bankers, mortgage lenders, and the Internet. Almost 60 percent of all mortgage activity is for refinancing.

MORTGAGE RATE CHECKUP

Current national average mortgage interest rates going into the weekend are:

*30-year fixed: 6.68 percent

*15-year flexible: 6.31 percent

*Adjustable rates: from 5.51 percent

Rates may vary from location to location, and depend on the amount to be financed.

CYBER HELP

The followin gweb sites provide information on refinancing:

www.eloanh.com

www.quickenmortgage.com

www.getsmart.com

www.homeshark.com

www.hsh.com