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A study conducted by LendingTree broke down a number of reasons why homeowners using its platform decided to refinance their mortgages. The company asks homeowners to choose a reason for their interest in refinancing their mortgage. Those reasons include paying off their mortgage faster, to simply browse current mortgage rates, getting a cash-out refinance, changing an adjustable-rate mortgage to a fixed-rate mortgage, or lowering monthly housing payments.
Of course, close to 44% of homeowners across the 50 largest metros in the nation considered refinancing to lower their monthly payments. The report also showed that 19% of homeowners wanted to refinance their homes in hopes of paying off their mortgage faster.
Meanwhile, more than 16% of homeowners choose to explore refinancing as a way to browse for a lower mortgage rate. Additionally, nearly 15% of homeowners who considered refinancing were seeking a cash-out refinance. The interest in cash-out is interesting as home prices have increased substantially, creating an ideal situation for borrowers who now have a considerable amount of equity in their homes.
Unsurprisingly enough, ARMs aren't a popular option for homeowners searching for a refinance. Less than 2% of homeowners chose that as their reason for refinancing.
Regionally, folks in metros like San Jose, San Francisco, and Las Vegas make up the largest share of borrowers looking to lower their monthly payments. Buffalo, Hartford, and Pittsburgh are the top metros where the largest share of homeowners consider refinancing to pay off their mortgage faster. Milwaukee, Columbus, and Kansas City had the largest share of homeowners who are simply looking to lower their mortgage rates. Buffalo, Phoenix and Tampa has the largest share of homeowners who were refinancing with a cash-out option in mind.
Despite the recent decline in refinances, borrowers are still looking for options when it comes to refinancing. With rates still relatively low, these numbers give mortgage professionals a look at where the focus is for most of their clients and allows them to better tailor their efforts.