Falling interest rates continue to fuel the refinancing market
Buying mortgage opportunities Each new year creates a feeling of uncertainty in the real estate market. When one year ends and another begins, questions often arise about which mortgage brokers and homebuyers to expect over the next twelve months.
Historically low-interest rates in 2019 helped boost a strong refinancing market. But what will happen in 2020? Will refinancing decrease or will the market remain strong? If refinancing is an important part of your closings, you can better plan your first quarter strategy if you know what to expect.
New year, the same trends for the mortgage …
One trend that almost all real estate experts agree with is that interest rates are expected to remain stable in early 2020. Over the course of the year, many analysts, including Fannie Mae, predict that these interest rates will drop further, in some cases to 3.6% on average. This is surely good news for homeowners who want to save money.
With the fourth quarter of 2019 forecasting a sustained rate of refinancing, this trend should continue in January and in the first quarter of the new year. Of course, few things are as volatile as the real estate industry. Although refinancing should remain solid, there are no guarantees. Therefore, it is always best to prepare for all eventualities.
Find good candidates for refinancing
Being a reliable mortgage professional involves connecting your clients with products that can help them achieve their goals. This means that not all customers interested in refinancing are suitable for this. Before selling a refinancing package to your client, you need to make sure that you are an ideal candidate for them. Ask them:
How long do you want to live in the house?
Would you benefit from a lower mortgage payment or pay your house faster?
Do you expect your income or employment status to change in the near future?
Would you like to benefit from cash refinancing?
What is your main reason to refinance your mortgage?
While low-interest rates will undoubtedly increase the number of refinancing applications processed in 2020, a homeowner must consider a number of other factors in addition to the interest rate before deciding to refinance.
The main question is whether the owner’s credit has improved or deteriorated since he bought his house. Another factor to consider is whether a reduction in the loan from 20 to 15 years will benefit the homeowner in any way.