Is It Time To Refi?
It seems Millennial homeowners are taking advantage of lower mortgage rates. According to new data, Millennial refinances have officially hit their highest point in more than a year.
Low Rates Spur Millennial Refinance Boom
According to the latest numbers from Millennial Tracker, Millennial refinances accounted for 15% of all loans for the cohort in April. That’s a 4% uptick over March and their highest point since early 2018. Increasing adoption of technology by mortgage lenders, as well as some maturing on Millennials’ parts, both play a role in this increase.
Interest rates continued to drop in April and Millennials jumped on the opportunity to refinance. The significant drop in time to close shows homebuyers were motivated to close refinances while rates were low, and that Millennials are showing increased maturity as a homeowning demographic.
Millennial Money Management
But Millennials aren’t just proving their maturity; they’re improving their financial stations, too. According to the tracker, the average FICO score of Millennial borrowers increased to 721 in April — well above the national average of 704.
They’re also increasingly turning toward conventional loans — known for their more stringent lending standards and requirements. Conventional loans accounted for 69 percent of all Millennials mortgages in April. More lax FHA loans made up just 26 percent.
Millennials borrowers who used conventional loans had an average FICO score of 745 for the month — the highest score since 2016. Borrowers who used an FHA loan had an average 670 score.
*This article does not represent legal interpretation or advice. This is not a commitment to make a loan. Loans are subject to borrower qualifications, including income, property evaluation, sufficient equity in the home to meet LTV requirements, and final credit approval. Approvals are subject to underwriting guidelines, interest rates, and program guidelines, and are subject to change without notice based on applicant’s eligibility and market conditions. Refinancing an existing loan may result in total finance charges being higher over life of loan. Reduction in payments may reflect longer loan term. Terms of the loan may be subject to payment of points and fees by the applicant. Seattle Mortgage Brokers, LLC NMLS: LO# 305371/1598279 | MB# 761615