Ramping up refinancing
Millennials aren’t just buying homes at record rates nowadays. According to new data from Ellie Mae, they’re also refinancing their existing ones.
Good rates, great refinance opportunities
According to Ellie Mae’s Millennial Tracker, which analyzes monthly closed loan applications from buyers born in 1980 to 1999, refinances made up 14 percent of all Millennials’ closed loans in September. That’s the highest refinance share since February.
Joe Tyrell, EVP of corporate strategy at Ellie Mae says the uptick is likely due to historically low interest rates.
“With average interest rates falling to their lowest point in 2017, Millennials are taking advantage of refinance opportunities,” Tyrell said. “While we are also seeing Millennials with more purchase power, the uptick in refinances indicates maturity among those Millennials who previously purchased a home and are looking for an opportunity to lower their monthly interest payments.”
Though many think of refinancing as reserved for older, more seasoned homeowners, Millennials are bucking those stereotypes. The average Millennial who refinanced in September was just 31.5 years old. They also had an average FICO score of 732 and were more likely to be male and married.
The resurgence of refinancing
Another report from Ellie Mae — the Origination Insight Report — shows that refinances aren’t just growing with Millennials, though. Refinances accounted for 38 percent of all closed loans for September, age or generation of the buyer not considered.
That’s up three percentage points from August.
According to Jonathan Corr, Ellie Mae’s CEO and president, low mortgage rates as well as quickening days-to-close helped improve refinancing across the board.
“The increase in refinances was most likely due to interest rates on closed loans dipping to 4.21 percent, the low for 2017,” Corr said. “Additionally, time to close a refinance dropped to 40 days as more lenders leverage technology to close loans faster.”
One year ago, it took an average of 48 days to close a refinance loan.
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source: The Mortgage Reports