Originally Posted by llamalluv
I don't get that part. If people are using the money to buy houses, then the money is going from one bank to another (or in some rare cases, to a seller who is likely to just put the money back into another house). I don't see how this makes the money "flow" except for a small percentage going to the agent/brokers and the bank for closing costs.
What I understood from her quote was that if people are allowed to refi to lower rates, homeowners will have lower mortgage payments. Economists would expect that the money saved on a lower mortgage payment would be spent, instead of saved, thereby stimulating the economy. Lower mortgage payment = more discretionary income.
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