Refinance Prospecting – updated February 14, 2024
The “silver tsunami” is coming. This is a term referring to aging Americans changing their housing arrangements to accommodate aging. In terms of prospecting for refinance business, this could have a huge impact on the housing market this year, according to analyst Meredith Whitney in a conversation with Yahoo Finance.
“The other major demographic trend you see is the aging of America,” Whitney said. “So what’s called the silver tsunami is 10,000 people a day turning 65. And by 2030, the entire baby boomer population or generation will be over 65.” These are great prospects for brokers looking for new refinance customers.
Also – look for cash out refinance prospects. We will be seeing households who are accumulating debt who need options.
Record levels of homeowner equity mean cash-out refinances are also on the table for many people. Meanwhile, with rates still low historically speaking, it will generally still pay to convert an older adjustable-rate mortgage to a fixed-rate loan.
Current mortgage rates are hovering around 7 %. This is way higher than at the start of 2021.
Are there Refinance Prospects Out There?
Absolutely. At current rates, there are around 9.8 million well-qualified homeowners who could lower their mortgage interest rate by at least 0.75 percent if they decided to refinance today. This is according to mortgage data company Black Knight.
Most of these homeowners can average a savings of $279 per month. That’s a potential savings of $3,348 per year. About 1.2 million of these homeowners could save up to $500 per month, for yearly savings of $6,000.
Why Haven’t They Already Refinanced?
If there are so many good potential refi candidates out there, why didn’t they all jump on the historically low rates? Some just aren’t sure of the savings that they would have while others are wary of the costs of refinancing. Smart Mortgage Marketers will stress the extra savings while offering incentive to cut down on closing costs. Some of it is timing.
Letting Homeowners know just how much they can save each month in a well thought out marketing piece or script could help you reach many of the millions of prospects waiting to take advantage of what the market has to offer.