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Mortgage Market

Low interest rates draw attention to refinancing and home loans

April 26, 2009
By RICHARD NILSEN/The Leader-Herald

Local lenders say the time may be right for either a first home mortgage or refinancing - it all depends on the individual situation.

Mortgage loan originator Salvatore F.G. Casale of NBT Bank in Gloversville, who handles home mortgaging and refinancing for area NBT branches, said he is seeing a large increase in applications compared to a year ago.

"We are doing more refinancing than first-time mortgages, but first-time mortgages are opening up, too," Casale said. "We're getting a bounce-back. There's a lot going through the pipe now."

Article Photos

The Leader-Herald/Bill?Trojan

Above, Lisa Loucks and Josh Barker, both of Johnstown, look over refinancing paperwork for their home with NBT Bank mortgage loan originator Salvatore F.G. Casale at the bank in Gloversville Thursday.

Dave Huckans of Hometown Mortgage in Perth agreed that business is picking up. He said his business is about 25 percent busier now than it was at the same time last year.

"We had eight employees and then the downturn came and we cut back to four," Huckans said. "With things picking up, we're thinking about hiring one or two."

With some 30-year fixed-rate mortgages below 5 percent interest, Casale said it makes sense for people to re-examine their home loans if they have a good credit rating and are planning to stay in their home long enough to make it worthwhile.

"It's a good time to look," Casale said.

According to the Web site, a 30-year fixed-rate mortgage could achieve a 4.86 interest rate, with a 15-year fixed-rate mortgage even lower at 4.61 percent.

However, Casale cautioned that didn't include closing costs, which could be $3,000 to $4,000.

Casale also said for refinancing to be worth a homeowner's money, the new loan should have an interest rate at least one point better than the old mortgage, and the family should plan on staying in the home for at least three years.

Huckans agreed with Casale. He said a two- to three-year minimum for home ownership was necessary for it to be worth paying the closing costs of refinancing.

"The bigger and longer the loan, the more advantage there is," Huckans said.

Josh Barker and Lisa Loucks of Johnstown were in Casale's office Thursday refinancing their home mortgage.

"The interest rates are so low," Josh Barker said. "We have no plans on moving."

Because Barker was in the early stage of application, he wasn't sure of the fees yet. But the low interest rates made him think it was worth negotiating a refinancing package.

Huckans said besides lower interest rates, another reason for the increase in business is less competition.

"There are less mortgage companies out there," Huckans said. "There were about 200 this time last year and now there are only about 50 regional mortgage brokers."

He said the traditional spring upsurge in home buying is helping business, along with the $8,000 first-time home-buyer federal tax credit for anyone who hasn't bought a primary residence within three years.

Melissa Chrysler of Mayfield worked with Huckans to take advantage of that tax credit.

Chrysler said she tried getting a home loan about 18 months ago through another mortgage broker but was unsuccessful and not happy with her experience.

"It was a long process," Chrysler said.

However, Huckans was recently able to get her a 30-year mortgage with a fixed rate of 5 percent on a home in Mayfield. Chrysler was pleased Huckans was able to keep her payment below $700 a month, including all fees, as she had requested.

Chrysler said she was especially surprised at the treatment she received as a divorced mother of two with limited income.

"I'm low income and [Huckans] worked it out to fit my needs," she said.

Huckans said where traditional banks may be doing more refinancing, he is actually doing more first-time mortgages.

"We want customers for life," he said. "We don't turn anybody away. We want them to come back."



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