A&D Mortgage's CEO says the refi dam breaks below a certain number, and the time to get ready is now
Four years of elevated mortgage rates have piled up a backlog of loans that will eventually need refinancing. With rates remaining elevated, mortgages are continuously being added to the list of eventual refis.
The 30-year fixed rate climbed to 6.65% for the week ending July 10, its highest level since August 2025, according to Mortgage Bankers Association data. Purchase applications fell 7% from the prior week. Most economists and industry veterans expect rates will eventually ease, though the timing remains uncertain.
Borrowers who locked in rates in recent years are all sitting on loans priced well above where the market is likely to settle once rates ease, and that backlog only grows the longer rates stay elevated. The harder question is timing, and whether there is an actual number that flips the market from quiet to frantic almost overnight.
Max Slyusarchuk (pictured top), founder and CEO of A&D Mortgage, believes there is, and he says the industry has already watched it happen once before.
"I think brokers and lenders, our partners, should be focused on getting ready for the rate drop," Slyusarchuk told Mortgage Professional America. "You have elevated rates for '23, '24, '25, '26, that's four years of elevated rates, and maybe even '27."
A psychological barrier
Slyusarchuk said while some borrowers may be waiting in order to save a specific amount every month on their mortgage, others will be guided by the psychology of a nice, round number.
"The minute the rate is under 6%, it starts flying," he said. "I mean if it's 5.5%, it's better. If it's 4%, it's better. But there is a psychological barrier. If you are at 5.99%, you are buying. If you 6.1%, you're hesitant to move forward. So there is that barrier and it is 6%."
He is encouraging brokers to make sure they’re prepared for this rate threshold, even if it feels far away now. At A&D Mortgage, they are racing to automate their own underwriting before that threshold arrives.
"I don't think we are 100% done, to be honest," he said. "The process will be done by the end of the year, full automation with AI on underwriting everywhere. Not 100% of underwriting is automated, but it will be by the end of the year. January 1, 2027, we'll be ready with the fully automated underwriting agents. That's what we're doing right now."
The company’s automation was built entirely in-house, Slyusarchuk said, rather than licensing systems from outside vendors that cannot be adjusted quickly when volume spikes. It allowed them to build a non-QM automated underwriting system (AUS).
"We have non-QM AUS," Slyusarchuk said. "That's a freaking big deal, which we're integrating with Encompass and a couple other solutions. That's a big deal, and nobody has that. That's an amazing tool for your underwriter, your loan officer, your manager. It's like DU for non-QM. That's the biggest thing that we have developed."
Preparing for the wave
With the higher-for-longer environment in place, Slyusarchuk believes more higher-rate mortgages could be added into 2027. However, if things change, he believes it is important to be ready to move. That’s why now is the time for preparation.
"You have to get ready and make sure you are there to refinance and capture all the business because all these five years of elevated rates will have to get refinanced," Slyusarchuk said. "You have to be there, you have to get ready."
He equated the work being done now with fishermen who cannot go out on stormy seas, but have to keep working to prepare for blue skies.
"When there's bad weather, the fishermen are fixing the nets," he said. "That's what you're supposed to do."
Slyusarchuk said preparation starts with the basics, and it’s all things that will help you even before a refinance wave arrives.
"Get your CRM together," he said. "Make sure you know your lender. Make sure you have some AI tools that you can get together."
He said the lender relationship is where the tier advantage gets built.
"Know the lender that you want to work with, build the relationship," he said. "Because we have all different tiers for our partners, you should try to get to a higher tier. Because once this volume starts kicking in, your loans will be taken first. Try to be a preferred broker for some of the lenders."
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