With Higher Rates, Does Refinancing Pay Off? | #ThinkingRefi? #TalkToYourAgent #SiliconValleyAgent #YajneshRai #YourAgentMatters


With Higher Rates, Does Refinancing Pay Off? | Realtor Magazine

With rising mortgage rates, more homeowners are finding refinancing isn’t necessarily going to lower their mortgage bill anymore. Lenders are seeing loan volume drop drastically, and they are looking to the purchase market to help make up the shortfall.

In 2017, 37 percent of the mortgage origination volume was from refinancings, the smallest proportion since 1995, according to Inside Mortgage Finance, an industry research group. Analysts expect the number of refinancings to shrink further this year. For comparison, in 2012, refinancings made up 72 percent of originations.

The number of homeowners who stand to benefit from refinancing is smaller due to rising mortgage rates. The number of borrowers who could benefit from refinancing dropped about 37 percent from the end of last year, according to data from Black Knight Inc. That represents the smallest share since 2008.

On the purchase activity side, originations are up, but not enough to offset a $366 billion drop in refinancing activity, according to Inside Mortgage Finance.

Still, the Mortgage Bankers Association is predicting mortgage-purchase volume to grow about 5 percent this year, but they predict that refinancing volume will plunge 27 percent.

Some lenders are trying to get more business by either highlighting home-equity lines of credit or pushing adjustable-rate mortgages.

“I think we will see lenders focus on retaining their existing customers more fiercely,” Ben Graboske, an executive vice president at Black Knight, told The Wall Street Journal.


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