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Banking & Finance

Rates, Mortgage Demand On The Rise

By Jenny Callison, posted Apr 20, 2018
Jeff Gilley, sales director at Alpha Mortgage, poses at the site of his company's new operations center on Oleander Drive. Alpha Mortgage, like other mortgage firms, is seeing continued strong loan demand. (photo by Jenny Callison)
Mortgage rates may be inching up, but demand for mortgages remains strong in the Wilmington market, say brokers.
 
“Basically, we’ve seen no slowdown; we’re still seeing an increase,” said Jeff Gilley, sales director at Alpha Mortgage. “I really don’t believe a person buying a house at 4 percent [interest rate] is going to stop because [the interest rate] is 5 percent. Plus, if someone were to wait for rates to come down, which they are probably not going to, the price of houses will have gone up.”
 
The rise in mortgage interest rates is capturing potential buyers’ attention, said Bill Jones of North State Bank Mortgage.
 
“Rates have gone up one-half percent in the last four to five months,” he said. “They are at about 4.5 percent now. That’s making people notice and I think a lot more people are coming into the market now because they think rates will be in the 6-8 percent range soon.”
 
Both Gilley and Jones cited the lack of housing inventory, especially homes in the $100,000 to $350,000 range.
 
“I don’t think builders can build new homes fast enough” to meet demand, Jones said, adding, “Seventy percent of my business is northern people moving here. Oak Island, Southport, St. James, Brunswick County are on fire. Up north, a lot of people have postponed retirement for five years or so, until they could sell their house. Now the flood gates are opening. This is a destination town.”
 
Coastline Mortgage Consultants owner John Russ said his homebuyers are living in a world of multiple offers and want to get pre-approved for home purchase to give them added leverage as they make bids on homes.
 
“Often there are five to six offers per property that’s in the $200,000 to $350,000 price range; there is not a lot of supply,” he said. “I’ve prepared six pre-approval letters in the last 72 hours; I’m not sure any of my clients got the house. The market is growing even though we have seen interest rates rise since the beginning of the year.
 
“It’s an interesting market right now: I thought we would see a slowdown, but we haven’t. Our first quarter 2018 numbers are trending above those of the same quarter last year.”
 
The value of pre-approvals depends on how thorough the vetting process has been. Russ recommends that would-be buyers speak with a mortgage officer who can run a credit check, verify income and employment and even potentially pass the loan application through the underwriting process.
 
“We’ll sign a loan application, we verify assets and income, then plug in the property address [once the buyer identifies the desired home]. The underwriter reviews the application and issues final approval. We’re doing about 30 percent of our clients that way,” Russ said, explaining that with a pre-approval document in hand, a buyer has an edge in a multiple-offer situation.  
 
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