The COVID-19 pandemic, while damaging some aspects of the mortgage industry, created big opportunities in others. A recent report revealed that Ellie Mae saw a 24% month-over-month increase in total closed loans from March to April 2020 with a 10% increase in refinances.
Refinances, in particular, were up to 65% of closed loans in April, in comparison to 55% in March and 51% in February, according to Forbes
. Unfortunately, the time to close all loans increased to 42 days in April, likely caused by the surge in the COVID-19 pandemic. In addition, Ellie Mae increased FICO scores on all loans in April.
“As interest rates drop, savvy borrowers are quick to take advantage,” said Jonathan Corr, president and CEO of Ellie Mae. “With average rates on 30-year conventional loans dipping to 3.48%, lenders are seeing a wave of demand at a time when necessary social-distancing measures can make managing their pipelines more difficult. Those lenders who invested in digital mortgage technology to manage their pipelines virtually are now able to capitalize on this surge in demand.”
With rates reaching historic lows, you'll find it hard to find agents who aren't encouraging borrowers to refinance, especially if they intend on sticking with that home for many years to come.