When Cindy and Peter Jones decided to refinance the mortgage on their slate-blue Colonial in Columbia, they had no idea how hard they'd have to compete for their lender's attention. Phone lines were jammed, the office was crowded and the loan officers seemed friendly but frazzled.
"We had no idea how many people had the same idea we did. had to be aggressive to get the lender to take our loan," Mrs. Jones says.
With mortgage rates at their lowest point in a decade and a half, lenders are smothered under refinancing applications. And in the crush, some are starting to lower their refinancing windows. In this environment -- as the Joneses learned -- good credit alone is not enough. You have to be persistent.
"Lenders are saying, 'My bucket is full and I'm not really interested in taking more business until I process the business I have,' " observes Keith Gumbinger, a research analyst at HSH Associates, a firm that tracks the mortgage industry.
Lenders like making the money that comes with making loans. But many are unwilling -- or unable -- to hire the skilled loan processors needed to handle the dramatic pick-up in refinancing since Christmas.
"You bring on a rookie and they're not familiar with how the systems work. They're not terribly effective. Also, hiring and training employees is an expensive and time-consuming process," Mr. Gumbinger notes.
In a recessionary period, many lenders are cautious. They predict the refinancing surge will be short-lived and don't want to be bloated with staff when it ends. They also vow not to repeat the mistakes of 1986, when many took on more work than they could handle -- causing errors and aggravation for countless customers.
"The mortgage industry would rather do a good job for some people rather than a poor job for a lot of people," Mr. Gumbinger says.
For those trying to elbow their way into a lender's inner office to refinance, mortgage specialists offer these pointers:
* Get a real estate agent to put your name forward at a lender's office.
It doesn't matter if the agent is the person who sold you your house or your brother-in-law. Chances are he will have a lot more influence than you. Refinancing surges occur rarely, but agents bring customers to lenders year after year.
Angelo Mozilo, president of the Mortgage Bankers Association of America, says an agent working as your angel can make a difference. "Realtors are the base business for mortgage bankers in this country. And there's a tremendous concern they get provided the highest-quality service."
Many realty people were miffed during the last refinancing surge by telephone holdups and other service snags. Lenders vow that won't happen again. Many are installing special phone lines for agents and giving them preferential treatment in other ways as well. As you compete with other refinancing customers, that means an agent should help get you the attention you need.
* Present yourself physically at the lender's office bearing documents needed for your loan.
Maybe you don't have a realty agent to be an advocate for you and you can't get through by phone to the lender of your choice. Then your best option is to take your lunch hour or day off and go directly to the lender's office.
It will be far harder for the lender to deny you the chance to apply for a loan if you're camped out in his office. This is especially true if you're carrying the papers needed to speed the initial application interview. These include two or three recent pay stubs, bank statements and a list of your debts (total outstanding and monthly due). Also bring the amount of your current mortgage balance (available by phone from your present lender). Recent tax returns and your deed can also be helpful.
* Don't haggle with the lender on the price of your loan.
The interest rates and points offered by a particular lender at a particular time aren't normally subject to negotiation. If you try to shave the price with the lender, all you're likely to do is waste your time and hassle the lender. Indeed, some busy lenders may be so put off they'll place your refinance application at the bottom of the pile.
"We're not car dealers. Our pricing is not set up that way," Mr. Mozilo says.
* Don't give up the fight.
You may prefer root canal surgery to the torment of mortgage refinancing -- especially when the lines at lenders' offices are so long. But if you play the game right, cooperate with the lender and persevere, you should prevail. Chances are your efforts will be rewarded handsomely in monthly savings.
U.S. consumers who have recently refinanced have achieved savings of at least $10 billion in interest charges, estimates Mr. Mozilo, president of Countrywide Mortgage. Most mortgage experts predict rates will rise again by mid-1992 or as soon as the sputtering U.S. economy shows signs of recovery. They urge consumers to take advantage of what could be a very narrow window of opportunity.
Says Mr. Gumbinger: "This is going to be the best time to `D refinance in the next decade. It's almost a once-in-a-generational opportunity."