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With mortgage rates reaching a record low this week nationally, local lenders
say they are getting many more requests from people who want to refinance.

Some rates are between 4.5 and 4.75 percent for a 30-year fixed loan in
the Triad.

“Our refinance activity has almost doubled in the last three weeks,” said
Jeff Cook, a senior vice president for NewBridge Bank in Winston-Salem.

He declined to give actual numbers but said that refinances account for
about 70 percent of the bank’s current residential-mortgage activity.

The national average for a 30-year, fixed-rate loan sank to 4.69 percent
— the lowest point since mortgage company Freddie Mac started tracking rates
in 1971.

Andy Matejka, a loan officer at The Mortgage Lender Inc. in
Winston-Salem, said he has gotten a lot of calls from people wanting to
refinance their mortgages.

He said, for example, that he is working with a couple who are switching
from an adjustable-rate mortgage at 9.75 percent to a 30-year fixed loan at
4.75 percent.

“Three or four months ago at the end of March, when the government was
going to stop purchasing mortgage-backed securities, we anticipated rates to
go up,” Matejka said.

But since that time, the recent economic crisis in Greece and other
European countries has made American debt look a lot better.

“There’s still a lot of demand for government debt, and that’s keeping
interest rates lower,” Matejka said.

Piedmont Federal Savings Bank in Winston-Salem is getting some
refinancing activity and getting a lot of inquiries about low interest rates,
but not a big increase in business, said David Smelcer, the bank’s senior vice
president of lending.

“We haven’t moved our rates as low as some of the competitors because we
are a portfolio lender, and we don’t sell our loans in the secondary market,”
Smelcer said. He said that Piedmont Federal offers a 5 percent rate,
regardless of credit scores and appraisals and other variables.

“Basically, if you can be approved for the loan, you’re going to get the
rate that we offer,” Smelcer said.

Mortgage lenders said that given the low rates, it can make sense to
refinance, but only in certain cases.

If a homeowner is planning to move in six months, for example, it does
not make sense to refinance and pay possibly $1,500 in closing costs, Cook
said.

Copyright (c) 2010, Winston-Salem Journal, N.C. Distributed by McClatchy-Tribune Information Services.