Hardly a day passes by without mortgage interest rates reaching a new, all-time historic low. For people with mortgages, this situation makes up a great opportunity to refinance their current debt. We’ve collected some good data that you can share with your clients as they weigh up whether now is the time to refinance.
The current situation with the market
A 30-year fixed mortgage will cost you 3.30% on average. That’s 0.22% down in one month. For a 15-year fixed-mortgage, rates have reached 2.79%.
While the rates could go even lower, it makes sense to refinance now instead of trying to time the market. “People are waiting for a rate a half a percent below where we are now relatively — that’s getting greedy. Don’t try to time the bottom, just pick the rate that makes the most sense,” says Brian Koss, executive vice president of Mortgage Network. Now is the best time to offer the borrowers to go for these rates. However, a few things must be considered first, before you refinance. The next section covers a few of the things
When it’s worth refinancing
What is the difference between interest rates of a current mortgage versus refinancing? If the difference is lower than 50 basis points, it’s probably not worth it. The difference of 1% or more? Refinancing might be a great opportunity.
Many of your clients will also need to consider closing costs. If the difference between the old and the new loans isn’t high, closing costs can make the whole process pointless. These expenses should be weighed carefully when making the decision.
Another question: the loans term. While 30-year loan is the most common option, it isn’t necessarily the best one. With such a low interest rate many borrowers can switch to a shorter plan, such as a 15-year loan. This way they can pay off their loan more quickly while lowering their monthly payment at the same time.
Finally- can the borrower qualify for a new loan? The rates are low, true, but the economy is in a bad shape and millions have lost their jobs. It makes it harder for a lot of Americans to qualify for a new loan.
How you can help your clients
Now that you have the data to share, we’ll leave you with a few ways to get in touch and help your clients know about the opportunities for refinancing- you can use Pulse, our CRM, to reach out, track and close new deals.
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1) Identify who can benefit from the refinance. Go through a list of your clients and mark those who fit the criteria above. Create a list.
2) Craft your message. Describe the current situation and explain why refinancing right now may be a good option, using some of the data points we’ve offered. Don’t be afraid to go into details—what may seem obvious to you could be a vital new piece of information for your reader.
3) Send out the messages. Modern email management systems are able to streamline the whole process. For instance, Pulse CRM has functionality to monitor lists and send out emails efficiently.
Are you swamped with refi loans right now? Let us know in the comments.
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