Which is more popular, a mortgage purchase or a refinance loan?
Mortgage Purchase Loans or Refinance
We’ve been hearing about mortgage loans for what seems like, forever. One overlooked aspect of the mortgage market has been refinancing. We’ve had low interest rates over the last number of years. As a result, many people with older, higher interest rate mortgages have been refinancing. In additional, some of these people have been cashing out. This is done by refinancing their mortgages and taking out excess cash. This cash can be used for home improvements, to pay down debt, investing, or whatever. And the refinance market has been the bulk of mortgage loans for many years.
Purchase Mortgages
However, as of this past January purchase mortgages exceeded 50%. In addition, the percentages have been climbing higher. In January 53% of all mortgages closed were purchase mortgages. And in February it was 57%, and in March it reached 63% of all loans. Also, the time to close the mortgages has been decreasing. In January the average loan took 51 days to close. And it continued to rise in February, and by March the average mortgage loan was closing in 43 days. The decrease in the time necessary to close either a mortgage purchase loan or a refinance mortgage loan is also decreasing the time it takes to close on the sale of a home.
Bottom Line
As a result of the low interest rates that we’ve seen, most of the refinancing is completed. So what does all of this mean to you, the prospective borrower? Probably not too much. It’s just another bit of info from Art’s Collection of Useless Facts. If you’d like to hear the history of Friday the 13th, drop me an email.