CENTERBURG – As bad as the economic fallout from COVID-19 has been, residential real estate has been remarkably resilient, Terry Bumpus, president and CEO of First Federal Savings and Loan in Centerburg, told the Mount Vernon News.
“We do home loans, that is the core of our business,” he said to the News. “You would think that our business would have [been] waylaid by the COVID-19 pandemic. It’s actually been the opposite. Part of it is being driven by the all-time low interest rates.”
Bumpus believes rates will stay low for at least a year but advises homeowners to consider refinancing during the pandemic as part of their financial strategy.
“We as an institution have been here 86 years,” he said. “We’re offering the lowest rates we’ve ever offered.” [If a consumer's job and income are stable], “now is a great time to look at refinancing.”
Lower interest rates have increased demand for houses, which in turn has increased home values.
“It’s still pretty much a seller’s market,” Bumpus told the News. “There are not enough houses on the market for sale.”
The bank has been “amazed” at the appraisals that are coming in during the mortgage application process, he continued. “They’re pretty healthy. Property is definitely appreciating.”
But even with higher prices, many homeowners are getting offers within a week, Bumpus said. “And they’re generally getting offers above asking price. That’s an astounding thing.”
The future of some industries— airlines, restaurants and tourism, to name a few— remains uncertain; but others, such as housing, remain solid; as does the stock market, Bumpus told the News.
In addition to lowering your mortgage rate, it would be wise to consider lowering the length of your mortgage as well, Bumpus said.
“If you refinance a 30-year mortgage to a 15-year, that makes a whole lot of sense,” he said. And cash-out refinancing to pay off other debts might make more sense with a shorter mortgage than it would for a 30-year loan.
Although his bank does not issue credit cards, Bumpus advised that it cannot hurt for consumers to call their card companies and request a lower interest rate.
“It’s worth a phone call,” he said.
