Refinance transactions have been largely non-existent for the past few years, as homeowners content with their low-interest rate loans have sat on the sidelines, financing their kid’s college tuition, home improvements and emergency needs through other channels or simply delaying until interest rates improve.
In recent weeks, the industry saw an increase in refi activity, as interest rates dialed back in the wake of back-to-back Fed cuts in September and October.
“The 30-year fixed rate decreased to 6.37 percent and all other loan types also decreased,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist in the organization’s October mortgage applications update. “The refinance index increased 4 percent, driven by a 6 percent increase in conventional refinances and a 12 percent increase in FHA refinance applications, as borrowers remain attentive to these opportunities to lower their monthly mortgage payment.”
While it is unlikely that we will see a total boom market in the refi vertical, there are indications that a strong refi market could emerge out of two sectors, those who have delayed refinancing for home improvements and other expenses and those who have committed to ARM loans. And ARMs continue to attract a larger share of homebuyers, according to Kan.
“ARM applications increased 16 percent over the week, which pushed the ARM share to 11 percent, with the ARM rate more than 80 basis points lower than the 30-year fixed rate,” Kan noted.
As a title agent, if you have neglected this part of your business, it may be time to review your refi processes to prepare for a growing influx of these transactions.
Add RON to your toolbelt
The first and most logical step is to consider making remote online notarization a standard offering to your refi customers. While we tend to think younger buyers will adapt more easily to the RON environment, notaries report that older buyers love the convenience of signing from their homes, so don’t assume you can’t use this important new tool for refi clients of all ages.
Refi walkthrough with staff
It is entirely likely that you have added to your tech stack since the last refi boom, so this would be an opportune time to review how you can further streamline a refi transaction with the tools already at your disposal. When that refi engine gets cranking, you will want all hands on deck to meet the demand, so examine your current processes to discover any glitches that may be holding up the file from progressing smoothly to close.
Update and increase your marketing
Where have all your refi customers gone? Could it be that as refi transactions fell off, so did your marketing efforts for this key client group? Time to freshen up your marketing and make a push to contact these customers directly to let them know what you are doing on your end to smooth out the kinks in these transactions for their clients.
Want to add RON to your list of services? Contact us today at Network Transaction Solutions, to learn how we can assist you with eClosings with RON, plus other specialized offerings such as municipal lien searches, HOA estoppels, mortgage payoff ordering and tracking, mobile home title services and more.
