Home / Daily Dose / The New Refi Borrower Profile
Print This Post Print This Post

The New Refi Borrower Profile

The rise of mortgage rates over the past few months has triggered a significant slowdown in refinance loans. According to an analysis by CoreLogic, the needs of homeowners who refinance in a rising rate environment is different from the rate-and-term borrowers that dominated the market during the refinance boom.

In this video, Frank Nothaft, Chief Economist at CoreLogic, explains how borrowers opt for refinance loans. "Homeowners that obtain a cash-out refinance when rates are at or above the rate on their prior loan may choose a term of up to 30 years on their new loan to keep the change in their monthly mortgage payment as small as possible," Nothaft said.

The analysis found that the share of refinance loans that cash out some home equity is generally very small during a refinance boom. "During 2012, when 30-year fixed-rates fell to an all-time low, the cash-out share of refinancing fell to 10 percent, the lowest recorded in CoreLogic’s public records data during the last two decades," Nothaft noted.

About Author: Radhika Ojha

Radhika Ojha, Online Editor at the Five Star Institute, is a graduate of the University of Pune, India, where she received her B.A. in Commerce with a concentration in Accounting and Marketing and an M.A. in Mass Communication. Upon completion of her masters degree, Ojha worked at a national English daily publication in India (The Indian Express) where she was a staff writer in the cultural and arts features section. Ojha, also worked as Principal Correspondent at HT Media Ltd and at Honeywell as an executive in corporate communications. She and her husband currently reside in Dallas, Texas. She can be reached at Radhika.Ojha@DSNews.com.
x

Check Also

Gateway Introduces Down Payment Protection Program

Gateway Mortgage has partnered with ValueInsured to introduce a new down payment protection program for homebuyers.

GET YOUR DAILY DOSE OF DS NEWS

Featuring daily updates on foreclosure, REO, and the secondary market, DS News has the timely and relevant content you need to stay at the top of your game. Get each day’s most important default servicing news and market information delivered directly to your inbox, complimentary, when you subscribe.