It's no secret that the 10-year Treasury Bond is directly tied to the fate of 30 year mortgages. In fact, long-term Treasuries often determine the borrowing costs for mortgages and are thus a key financial indicator for the upcoming market. To further see the correlation, you can simply take a look at the interest rate drops from last November, which resulted in a positive home purchasing upswing. To date, as interest rates continue to fall by nearly a percentage since April 2019, and we enter an era where inflation is potentially coming to a rapid end, many experts predict that the era of the ReFi boom is also going to change.
Don't Drop the Ball On Little ReFi Boomlets
During the Mortgage Bankers Association's (MBA) National Secondary Market Conference on May 20, 2019, it was suggested by industry experts that during the last decade, rates have hovered between 3.5 percent and 4.5 percent. However, as seen in November 2018 and from April–May 2019, there are frequent occurrences where the rates drop below 3.5 percent. In these instances, experts suggest that ReFi boomlets can occur.
In today's market, new construction is on the rise. Millennials are beginning to become their own form of "baby boomers," as they dominate the job market, begin to get married, and think about transitioning from renting to buying in a low-interest market. The good news is that like millennials, move-up buyers can also benefit from ReFi boomlets. These buyers, such as those who entered the real estate market with mortgages hovering around 4 percent, should consider refinancing during the boomlets. Not only can move-up buyers choose to refinance so they can more rapidly purchase a new home, but in the right markets they could also purchase higher valued homes, which would inevitably free up properties at the lower end of the market.
Earlier this year, mortgage rates saw the largest single week decline in a decade. A Black Knight report showed that during this time an estimated 4.9 million homeowners were able to reduce their interest rates by a minimum of .75 percent. The latter data once again shows the importance of being prepared for ReFi boomlets. The potential for predicted ReFi boomlets means that lenders should not be caught unaware. In fact, lenders should contact clients whose loans were on the high end of the 3.5 percent to 4.5 percent scale. During a ReFi boomlet, their clients could stand to save large sums. Of course, if lenders are to truly capitalize on the short period ReFi boomlets, then they need the help of a trusted title company to ensure a smooth and efficient settlement.
The Ins-and-Outs of Re-Fi's
At Velocity Title, we pride ourselves in our streamlined settlement processes, experienced staff, and quick turnarounds. Through a clear line of communication, we can help lenders achieve more refinances during the potential windfall opportunity that exists while interest rates are down. Don't delay. Prepare your clients for ReFi boomlets and know that Velocity Title is standing-by to ensure you can capitalize on the unique market opportunities that are staged to occur over the next 12 months. To learn more, today!