North Olympic Peninsula banks have been inundated with inquiries from customers seeking to refinance their home mortgages amid unusually low interest rates.
“It is unreal,” said Lori Taylor, Wells Fargo home mortgage specialist in Sequim.
She estimated that she is receiving from 20 to 40 phone calls a day from people inquiring about refinancing, which is at least double the amount per day in November.
“The phone has been ringing off the hook,” said Dakoda McKennon, assistant manager of Washington Mutual’s Port Townsend office.
McKennon said the amount of refinancing applications the bank has received has quadrupled over the last two months.
While banks offer different loan packages, each say their rates have dropped about 1 to 2 percentage points in the last month or two. Some are offering rates around 4.5 percent with a loan fee.
Good time to buy
Bank representatives say that the low rates also make it a good time to buy a home.
Home sales remain low because of a lack of consumer confidence and job security, said Roger Kelso, First Federal senior vice president of credit administration.
“I’m not going to borrow more money if I don’t know if I have a job tomorrow,” he said.
First Federal, which has locations in Clallam and Jefferson counties, has seen the number of customers refinancing to have at least doubled in December over the previous three months, Kelso said.
Kelso said the lower interest rates are due to a higher sense of financial stability within the lending industry as a result of the federal government bailing out lending giants Fannie May and Freddie Mac.
“People are looking for safe places to put their money,” he said.
“Having the actual visible strength standing behind them lowered the risk,” he added, referring to financial support from the federal government.
This, Kelso said, has a ripple effect through the rest of the lending market.
“The rate they would pay to borrow becomes the beginning point for the rates they would charge to loan that money to somebody else,” he said.
When considering refinancing, bank representatives say people should come prepared and fully consider how much of a financial benefit they will receive.
“It’s a numbers game,” Taylor said.
“They have to calculate truly what they are going to be saving.”
McKennon said it’s important to schedule an appointment.
Banks are having less time to deal with walk-ins because of the increase in people refinancing.
He added that a customer should expect to devote an hour to sitting down with a mortgage representative.
Kelso said that a customer who comes in prepared is more likely to get locked into a desirable rate.
He added that customers need to make sure that they understand what they are signing and are familiar with the lender.
“Don’t get any unrealistic expectations,” he said.
“The market is in a great deal of flux right now.”
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Reporter Tom Callis can be reached at 360-417-3532 or at tom.callis@peninsuladailynews.com.
