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Low rates spur refinance boom

October 08, 2009|Times Wire Reports

Homeowners hustled last week to refinance their mortgages after interest rates fell below 5% for the first time since May.

Refinance applications rose 18% from the previous week, the Mortgage Bankers Assn. reported, as rates on 30-year home loans dropped to their lowest level in four months to an average of 4.89%.

With extra cash lining their pockets each month, homeowners could help the economy recover. Since the recession began, consumers have reined in spending, which accounts for up to 70% of the U.S. economy.

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