Low interest rates benefit market, area home buyers

Home buyers are taking advantage of low interest rates to refinance and to purchase more expensive homes.

"Those in smaller homes realize they can buy a larger home," said Darren Stewart, assistant vice president of People's Bank in Forsyth. "We see more requests for people who want to combine their first and second mortgage and have them on one low-interest loan."

Ruth Snowden, branch manager at Countrywide Home Loans, said "this is the most interesting time in lending I've ever seen, and I've been doing this for 32 years. I can place almost everyone in a home."

She said Countrywide's volume on home loans is up 33 percent compared with this time last year.

"Last year was a very lively market," she said. "The lowering of the interest rates has encouraged some people to move up into a more expensive home. We're selling more to first-time buyers, though."

The interest rate has been hovering around 6 percent for an extended period.

Aaron Jernigan, president of The Bank's mortgage division, said their third quarter is up 30 percent over the third quarter of 2001.

"The majority of the loans are refinancing, but the purchase business is still steady," he said. "More people are refinancing because of the significant drop in the mortgage interest rates."

Jernigan said this is an excellent time to purchase a home due to the low cost of financing.

"We're seeing people put their first and second mortgage into one mortgage," said Aaron Jernigan, president of The Bank. "The people going from a 30-year to a 15-year loan are saving between $50,000 and $100,000, depending on loan size.

Jernigan believes the mortgage rate will be steady through the second quarter of 2003.

Stewart said the market for first-time home buyers is "going crazy. There are a lot of new homes in Christian County."

Stewart said experts predicted in May that the interest rate would be at 7.5 percent by now.

"But we haven't seen that," he said. "Trying to predict what the interest rate will be is like predicting the weather."

Snowden doesn't believe the residential lending market will slow down much.

However, "if we go to war or see another 9-11, we may see a drop off in activity," she said.

Snowden also has seen an increase in the number of people wanting to purchase a second home.

"People from out of state are buying a second home so they can be near their family, or they're buying a house now because they plan to retire here," Snowden said.