Homeowners looking to refinance their loans and cash in on record-low interest rates are boosting business for mortgage lenders in North Texas, executives say.
At Colonial Savings, applications have increased in the last 30 days, adding 1,000 mortgages and $200 million to the company's loan pipeline, said David Motley, president of Colonial and its Colonial National Mortgage arm. Eighty-three percent of the new inventory has been for "refis," which now make up 73 percent of the total pipeline, he said.
"In a normal market, which we haven't seen in a number of years, you'd normally see refis be 20 percent of the market and purchase money be 80 percent," Motley said. Overall, Colonial is "about flat" in mortgage activity this year compared with the same time last year, he said.
At WR Starkey Mortgage of Plano, Jim Bane, vice president and Fort Worth branch manager, said 65 percent of applications were for new purchases this month, down from 90 percent in July, as refi applications increased.
"Right now, we are covered up with refinances," he said.
The company's new-purchase business has been helped by relocations, including some by Alcon, the giant eyecare company in Fort Worth. "There's a lot of people moving to town," he said.
At Benchmark Mortgage, Chad Bates, regional vice president, reported "strong activity." About 60 percent of the loan volume in the firm's pipeline is for new purchases, he said.
Typically, the firm sees about 85 percent of its business from new purchases, he said.
"That started shifting 30 to 45 days ago, when we had the latest rate dip," he said.
At Colonial, prospective buyers with good credit can expect an interest rate of 4.25 percent, no origination fee and no discount points for a 30-year conventional loan, Motley said. For a 15-year loan, rates may go as low as 3.5 percent with no points, he said.
At Starkey, 30-year conventional loans may run as low as 4.125 percent with no points, and 15-year loans as low as 3.375 percent with no points, Bane said. At Benchmark, 30-year loans may run in the "low to mid-4s," and 15-year loans as low as "mid- to high 3s," Bates said.
Motley says he's surprised that there isn't more new-purchase activity given the low rates.
Bad news about the economy hasn't helped, and the Obama administration's foreclosure prevention programs just "delay the inevitable," Motley said.
Bane said Starkey expects mortgage rates to remain "pretty stable for the next six months."
Bates of Benchmark said, "I really think this rate environment is going to help turn this economy around."
He noted a new report showing that 63 percent of U.S. mortgages are at interest rates of 5 percent or higher.
"That's a big chunk of people that need to be looking at refinancing," he said.
Scott Nishimura, 817-390-7808