THE SHAPE OF THE RECOVERY TO COME. Low interest rates induce refinance applications.

Once a reasonable [current value] is in hand, would-be refinancing applicants should compare it to their outstanding principal balance on their mortgages. If the home’s value is more than 90 percent of the balance, applicants should reconsider their decision to pursue refinancing at this time, [Sycamore banker Bud] Weinstock said.

“It’s probably not going to be worthwhile,” he said.

If, however, the figure falls closer to 80 percent, he and [DeKalb banker Shelley] Rhoades said to pick up the phone and give them a call.

“There is the potential for huge savings right now,” Rhoades said. “You just need the right numbers to unlock it."

The banks are being more conservative about who gets a refinancing. Gone are the days of take-cash-out refinancing. On the other hand, I bet the people who have equity in their houses under the new rules aren't the people who splurge on the latest flat-screen televisions and other manifestations of excess. But their improved cash flow will turn into some consumption out of higher permanent income.

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