Record-low mortgage rates are helping local banks bring in record-high customer traffic as York County homeowners seek to refinance their loans.
Last week, average U.S. rates for 30-year fixed mortgages fell to 3.79 percent, and rates for 15-year fixed mortgages fell to 3.04 percent -- rates that haven't been seen since the 1950s.
"Rates are very attractive. This is a great time to sit down with a trusted adviser," said Sam Miller, loan production manager at M&T Bank for York and Adams counties.
Mortgage application submissions, which includes refinancing, increased by about 2 percent during the first week of May, according to a Mortgage Bankers Association report. Of those applications, 72 percent were from homeowners seeking to refinance their mortgages, the report said.
Shorter terms: While refinancing is most popular for reducing monthly mortgage payments, homeowners also can save money by reducing the term of a 30-year loan, Miller said.
And though 15-year and 10-year terms are very popular during a refinance, he also shares another option with his clients -- one that he previously chose for himself.
"It's sort of the ugly stepchild of the industry that nobody talks about, but I often suggest the 20-year loan," he said.
It provides all the equity benefits, without the dramatic increase in payment, he said.
"It's more than just a lower payment. It's about having the American dream. You can't realize that dream until you really own your home," he said.
Qualifying: Refinancing can help mortgage holders own their homes faster, and a current mortgage statement is all a customer needs to get started, he said.
"Don't assume you can't qualify," he said.
Applicants who have second
mortgages can run into some obstacles, but there are options, he said.
Homeowners upside down on their mortgages because their home is worth less than their loan may also run into some obstacles, lenders said. Applicants looking to refinance in those situations may qualify on the credit side but still struggle because of home values.
However, those applicants shouldn't be discouraged from looking into refinancing because approval is a case-by-case basis, lenders agreed.
"Does it make sense for everyone to refinance? That depends. But it makes sense for at least everyone to look into it," said Debbie Jones, residential mortgage banker and team leader at Susquehanna Bank.
If mortgage holders are now paying an interest rate in excess of 5 percent and refinance at the current 3.79 rate, they will save thousands. "The numbers can be mind boggling," Jones said.
Homeowners who don't owe more than their home is worth and have sustained good credit scores should contact a mortgage lender, she said.
"Rates might not be this low ever again," she said.
-- Reach Candy Woodall at 505-5437 or firstname.lastname@example.org.