Why Do Refinancing Swings Vary?

  • October 07, 2015

What causes an upswing in refinancing loans? What pushes people away from this option? While the reasons are varied and extensive, here are just a few to explore in more detail.
 
Rates – The ever-present and constant influencer when making financial decisions is the rate. When rates are low, the benefits for current homeowners to refinance their loan are much generally higher. Typically, lower rates indicate a greater savings for refinance customers via a new lower rate for their home loan or potential lower monthly payments.
 
Timing – Homeowners are generally required to wait a specific amount of time after obtaining a home loan before they are eligible to refinance. During this time, a lot can change. Some homeowners get a home loan with the intention of refinancing at the earliest eligibility. But before that time comes, rates could have changed or financial circumstances may prove refinancing a bad choice for the situation.
 
Inventory – When there is more inventory in the housing market, the purchase market booms. So rather than refinancing, some homeowners decide to make a more drastic change and simply move.
 
The pros and cons of refinancing are constantly changing both with the market and with each unique borrower. All of these cases are unique and not considered to be the norm or serve as mortgage advice. All homeowners are advised to discuss the benefits and their eligibility for refinancing with a mortgage professional.

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