Millennials move to refinance
Low mortgage rates are pushing more and more Millennials to refinance. Overall refinances jumped 9 percent for Millennials in the last month. They rose even more on conventional loans.Verify your new rate (Sep 22nd, 2020)
Tracking Millennial refinances
According to the latest Millennial Tracker from mortgage technology provider Ellie Mae, refinances accounted for 23 percent of all Millennial mortgage originations in July. That’s a 9 percent increase for the month.
If you look at just conventional loans, Millennial refinances jumped 10 percent, accounting for 27 percent of all closed loans for the month. VA refinances increased 7 percent, while FHA refinances increased 2 percent.
As Joe Tyrrell, chief operating officer at Ellie Mae, explains, “We’ve seen interest rates for Millennials drop consistently throughout 2019, but from April through June, the refinance market was essentially flat. In the months leading up to July, consumers believed that rates would continue to decrease, and they were correct. Now, millennials are reaping the rewards and locking in historically low rates.”
Shying away from FHA
Another trend to note is the recent Millennial preference for conventional loans. In July, the share of Millennial conventional loans increased 2 percent, while the share of Millennials using FHA loans actually decreased the same amount.
Considering the average FICO score for a Millennial borrower is 728, it comes as no surprise.
Still, as Tyrrell says, “Lenders need to do a better job of educating potential homebuyers on various loan types, especially with rates as low as they are,” Tyrrell said. “FHA loans, for example, have more flexible credit requirements and require smaller down payments, which should be perfect for cash-strapped Millennials.”Verify your new rate (Sep 22nd, 2020)
Get today’s mortgage rates
Are you a Millennial looking to refinance? Then shop around and see what mortgage rates you qualify for today.