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Home | Daily Dose | What’s Keeping Borrowers from Refinancing?
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What’s Keeping Borrowers from Refinancing?

A new commentary from Fannie Mae attempts to address a perplexing question: With mortgage rates down steadily in the last several years and greater opportunity for significant savings, why have so many borrowers elected not to refinance?

Approximately 40 to 50 percent of mortgage borrowers say that they have not refinanced the mortgage on their current home, according to Fannie Mae's Housing Survey data collected through June 2013.

Examining the topic in a study is Fannie Mae's senior manager of business strategy, Li-Ning Huang, Ph.D.

According to Huang's findings, the top three most common reasons cited by respondents for not refinancing are:

  • Not reduce payments enough
  • Closing costs too high
  • A desire to not lengthen loan terms

The data also shows that some borrowers have tried to refinance in the past, but were unsuccessful. According to the report, borrowers among that group tend to exhibit higher financial anxiety, doubt their ability to get a mortgage today, and hold a more pessimistic attitude overall about their future financial situation and the overall economy.

Findings from the survey suggest that, "better awareness of one’s financial situation could encourage consumers to consider refinancing and to take action," Huang said.

Huang notes that financial education, awareness, and messaging are critical factors in encouraging troubled homeowners to refinance. Additionally, resources and tools that help build financial literacy and awareness could lead to higher rates of refinancing.

About Author: Colin Robins

Colin Robins
Colin Robins is the online editor for He holds a Bachelor of Arts from Texas A&M University and a Master of Arts from the University of Texas, Dallas. Additionally, he contributes to the MReport, DS News' sister site.

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