Replace the Disappearing Refinance

First-time homebuyers should be a lenders focus in today's marketplace.

In the Last few months, we’ve had several credit unions tell us they want to promote refinances to bring those numbers up. We understand the thought process here. When numbers on a specific product are down, you promote those products to bring them back up. Sounds simple enough. However, when it comes to mortgage lending, you have other factors to consider and you need to communicate them clearly to your marketing department.

Refinances are slowly dwindling — not because your credit union hasn’t done a good job marketing the product, but because rates have been considerably low for many years and at this point most homeowners have already refinanced their home if they are planning to. According to the latest information from the Mortgage Bankers Association, refinance volume is down to it’s lowest levels since 2009 and 50% from a year ago. If you are going to be successful this year in mortgage lending, your concentration should be on purchase loans and cash-out refinances.

Marketing efforts should pay special attention to products geared toward audiences such as the first-time homebuyer, those moving up or scaling back and people who want to take advantage of the equity in their homes. These specific buyers will position credit unions for growth in mortgage lending no matter how rates may inch up this year.

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