Low Rates Lift Volume for Patchogue Lenders

Record-low interest rates have lifted refinance volume at local mortgage companies, but Patchogue area experts say fears over job losses are still stifling home sales.

Rates are lingering near historic lows, with a 30-year fixed-rate mortgage charging 4.43 percent last week, according to the Mortgage Bankers Association. That's the lowest rate on record since the MBA started tracking mortgages in 1990.

Deborah Galligan, owner of Swan Realty Corp., said rates are currently the lowest she's ever seen in her 28 years in the housing industry.

For borrowers, that means monthly payments on new loans are about as low as they can get, and homeowners who refinance from a higher interest rate could shave hundreds off payments.

The opportunities have led many Patchogue residents and homeowners across Long Island to seek out refinances, and local mortgage companies say low rates have bumped up volume during a usually slow period.

Mike McHugh, head of Continental Home Loans, said his company had its largest month for loan originations in August, thanks to low rates.

"We have an influx of refinance business coming in," McHugh said, adding refinances jumped from 20 percent to 40 percent of his company's business last month.

The average refinance knocks between $200 and $250 off monthly mortgage bills for borrowers by locking in lower interest rates, McHugh said.

"Refinances are an excellent opportunity right now," said Jasper Celauro, head of Choice Mortgage Services and Bellbrook Realty. He added low rates also present an opportunity for homebuyers. "Prices are low and interest rates are low, so you might be able to get something you couldn't dream about three to four years ago," he said.

Celauro said he's seen some increase in refinance volume because of low rates, but any large jump has been suppressed by the problem of falling home values. Because values have dipped and many homeowners mortgaged most of their equity during the housing market's glory days, many of those who want to refinance don't have the equity left in their home to do so.

Many homebuyers have also failed to bite on the low-rate opportunity and remain on the sidelines in fear the economy could take a turn for the worse and wipe out their jobs.

"People who have a job aren't sure they're going to keep it," Celauro said. "Unless people have a job they can't get a mortgage regardless of where the rates are."

Galligan said many more potential borrowers would be taking advantage of low rates if they weren't worried about unemployment.

Even though there haven't been any big leaps in home purchases, Galligan said low rates have kept business steady at a time when volume usually dips. August is historically a slow month for home sales because potential buyers are busy enjoying the last days of summer.

"This August, we did very well considering," Galligan added.

While no one's sure when rates will bounce back, McHugh said he expects them to remain low for the foreseeable future. He cautioned, however, potential borrowers shouldn't hold off because rates could turn around tomorrow.

Galligan said she's hopeful favorable rates will carry her firm through its busy period, which typically starts at the end of summer and lasts until Thanksgiving.

"Rates are so low it's actually amazing," she said. "I think the low rates will keep us going."