Millennials rushed to check their refinancing options with the recent drop in mortgage interest rates. In fact, refinance applications rose 116% the week of August 4th, according to the Mortgage Bankers Association.
CNBC reported that Quicken Loans experienced their best quarter for mortgage originations since they started their business 34 years ago—over $11 billion in mortgage volume this past June. And their total quarter volume hit $32 billion. These are the best numbers they’ve ever seen.
Although the majority was due to refinancing, there was also an increase in homebuying that didn’t hurt. A decrease in the average interest rate on the 30-year fixed mortgage is another potential contributor to their record-breaking numbers.
In past years, seeing a slowdown in refinances due to rising interest rates led to layoffs in the industry. Today, Quicken Loans is looking to hire new people to manage the sudden demand for refinances.
Millennials were eager to take advantage of the rate drop with almost double the amount seeking to refinance their mortgages in June from 2018’s 8%. According to CNBC, Ellie Mae reported a jump to 14% this past June.
Joe Tyrrell, the chief operating officer of Ellie Mae, told CNBC that millennials were anxious to lock in a lower interest rate. He says Ellie Mae will be watching how drops affect behavior as consumers, especially millennials, look to lower their mortgage payments.
CNBC also reported SunTrust Bank saw a rise in customer volume. The bank was even warning people it might take longer to get through the process with the increase in clients seeking to refinance.
Sherry Graziano, the senior vice president and mortgage transformation officer at SunTrust, explained to CNBC that there are many reasons clients are looking to refinance, including:
She warns people to keep in mind that there are transaction costs involved when refinancing. For homeowners who might be planning a move in the next year or two, they could save more money by sticking with their current mortgage rates, instead of paying the transaction fees.
With the ongoing fluctuations in mortgage rates, it might be best to speak with a lender to have them keep an eye out for the right time to refinance. CNBC noted that at the time of their report, rates fell more than 15 base points in eight days and then went back up.
Black Knight told CNBC that as these numbers fluctuate so does the number of people eligible to qualify and benefit from refinancing. They say that the best refinance candidates are those with a 30-year mortgage and a maximum 80% loan-to-value ratio. They also need a credit score of 720 and above. These people could take off a minimum of 0.75% off their current first lien rate if they take the time to refinance.
Having an experienced title partner like Acuity can streamline refinance closings for mortgage holders nationwide. Now’s the time for lenders to take advantage of the boom in refinances while consumers are anxious to lower their payments and improve their own monthly cash flow.
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