While soaring home prices and low inventory are probably stressing your first-time homebuyers, there’s another segment of your borrowers who are sitting pretty – your homeowners.
If you’ve noticed your refi pipeline drying up, you’re not alone. That’s because refinance applications are currently 22% lower than they were a year ago, according to the Mortgage Bankers Association. However, as fewer borrowers can benefit from a rate reduction refinance, there is another way to reconnect with your homebuyers – cash-out refinances.
Homeowners with mortgages (about 62% of all properties) saw their equity increase by 20% in the first quarter from a year earlier, according to CoreLogic. That’s an average gain of $33,400 per borrower. There are many reasons to contact your past clients to determine if they would benefit from extracting equity through a cash-out refinance.
Homeowners who’ve spent an increased amount of time at home may have taken a critical eye to their home this past year. They might prefer to renovate or expand their current home rather than enter the fiercely competitive purchase market. In addition, older homes might need repairs that the homeowner has been delaying due to affordability. Homeowners may not realize they are sitting on a nest egg that could comfortably finance these renovations and repairs.
Homeowners who have accumulated debt due to a period of lost employment this past year may not realize they can still qualify for a refinance. Fannie Mae’s “RefiNow” program can help lower-income homeowners who earn 80% or less of their area’s median income and are current on their mortgage payments reduce their monthly mortgage payments.
If your homeowners had a FinLocker, they would be able to monitor their home’s equity and use the Home Equity, Debt Consolidation, and Home Affordability calculators to help determine their next mortgage transaction strategy. As their mortgage originator or mortgage servicer, you would be able to notify them of refinance opportunities by marketing to them directly through the app. And you would be just a click away when they’re ready to initiate their mortgage application through the app.