Home > Mortgage Loans >
Mortgage Refinancing > Mortgage Refinancing Helps Keep Fragile Economy Floating
Mortgage Refinancing Helps Keep Fragile Economy Floating |
|
The boom in mortgage refinancing is among the most important reasons behind the growth of the nation's economy in the recent past. Record low interest rates have prompted homeowners to cash in on the massive savings involved in mortgage refinancing at substantially lower rates. Many economists attribute the mortgage refinancing boom to be the reason for an otherwise sluggish economy staying afloat. Due to the refinance index setting records of late, homeowners have been reducing monthly payments apart from withdrawing up to $200 billion in additional cash from inflated home values. Thus they paid off high interest debts as well as boosting spending power. This is the view of Bruce W. Mason, chief economist for Union State Bank, the largest bank with headquarters in the Hudson Valley. Union State Bank reported an unprecedented rise in mortgage refinancing for its branch network in the Rockland Westchester area. The past year has witnessed a 69% increase in the number of the bank's loan applications from 2003. The dollar volume of loans closed in 2004 catapulted to 64% from the previous year. With application inflow at an all-time high, additional staff was called for the mortgage refinancing department for the huge increase in volume, according to Harry G. Morphy, senior vice president and retail loan division officer for Union State Bank. Refinancing existing loans accounts for approximately 90% of all its residential loan activity. Murphy's contention for the spurt in mortgage refinancing is the several rounds of interest rate cuts by the Federal Reserve Board in the last 12 months. Following the post 9/11 tragedy Fed cut in interest rates led to a sudden rise in refinance applications. Though the volume continued into the early 2002, late spring and early summer began leveling off. With the Fed's further cuts in early November, a similar surge in refinancing has resulted. Undoubtedly, 2002 proved their record year for mortgage loans in terms of both closings and dollar volumes that was unprecedented. Union State Bank has been compelled to streamline the closing process for quicker and easier handling of customers. They are proud of their speed in closing loans. A timesaving technique has been the bank order of appraisals at the time of receiving the applications. They have also put together a team of 40 closing attorneys to deal with customers. They have also joined nearly a dozen other banks for its own title insurance agency called New York Bankers Title Agency East, LLC. All their efforts are devoted to saving time for customers by making the loan process most convenient. Most bank's residential loan activity involved mortgage refinancing. More recently a lot more refinancing of loans has been of other banks with rates less competitive. Union State Bank has some of the most competitive mortgage refinancing rates in the region to keep up with the surging volumes. Mortgage loans offer 1/8% off the rate for customers choosing automatic deduction of monthly payments from checking accounts. Customers use this low-rate environment to convert to shorter term and biweekly loans saving thousands of dollars in interest on the remaining duration of the mortgage refinancing loan. Typically a $250,000 loan saves over $60,000 in interest payments and reduces the loan term by 6.5 years through refinancing with a biweekly loan. Approximately half of all their recent loan applications are new accounts. This helps the bank build other business with new customers. Mortgage refinancing can be a great way to cross-sell other bank services. On closing this business, the bank offers the home equity loan, deposit products and credit cards. Part of Union State Bank's philosophy of Do Business With Us, Do Better With Us. Apart from the low rate and no annual fee for the first year, USBs regular Visa and MasterCard's include $150,000 travel insurance, 24-hour toll-free travel hotline, discount travel service, and auto rental discounts. For the Gold cardholders, $500,000 travel insurance, 24-hour travel emergency assistance and discounts on eyewear, auto rental insurance and pharmacy purchases are offered. Mason explains that mortgage refinancing is also affected by the slowing demand from record levels in the past two years. Higher rates are capable of spurring another influx in refinancing with people already jumping market. |
|
| ------------------------ |
|---|
|
|
| ------------------------ |
|---|
|
|
|
|
| ------------------------ |
|---|
|
| ------------------------ |
|---|
Custom Search
|
| ------------------------ |
|---|
|
|
| ------------------------ |
|---|
Consumer Alerts | About | Bookmark Us | Contact | Espanol | Privacy Statement | Copyright | Terms & Conditions | Financial Widgets | SiteMap
Copyright © 2006 Credit Loan, LLC. 235 APOLLO BEACH BLVD, STE 218 Apollo Beach, Florida 33572 All rights reserved.
Disclaimer: The content provided on CreditLoan.com is for informational purposes only; do not make any financial decisions based on its content. Financial decisions are personal, based on an individual's situation. Consult with a financial professional before making any financial decisions. CreditLoan.com is not liable for your financial actions.
