By Mike Miles

Mike Miles is one of the owners of Fountain Mortgage. 

August 20, 2019

Today, I’m letting you in on a few secrets about Millennials.

1.    They’re savvy. 
2.    They’re opportunistic.
3.    They’ve been driving a huge refinance boom this summer.
4.    We should all follow their lead on #3.

Mortgage rates are low. Like really, really, really low. 

If you haven’t looked into refinancing, seriously, what are you waiting for? The 10-year yield (the bond most closely tied  to mortgage rates) is currently at a level not seen in about six years. 

Historically, borrowers have had perceptions that loan costs and the “hassle” of underwriting mean it’s only worth refinancing every once in a while. 

Well, the Millennials aren’t letting perception get in the way of good thinking. This generation is gobbling up interest rate opportunities, and you know what? It’s super smart. 

A year ago, only 8 percent of millennial mortgage applications were to refinance. This means that 92 percent of millennial mortgage applications were to buy houses. This summer, millennial mortgage applications for refinance loans almost doubled. 

Overall, applications to refinance were up a stunning 116% the second week of August compared with a year ago, according to the Mortgage Bankers Association. This is significant. 

Other generations should take note … don’t wait to refinance because you just got a new home loan in the past 24 months. Don’t talk yourself out of doing something smart. It’s not as hard or expensive as you probably think it is.

•    Refinancing your loan takes about two to four weeks.
•    Costs average $2,000 to $3,000.
•    BUT. You can skip up to two payments…meaning you can pocket those skipped payments to make or exceed the cost of the refinance.
•    You can lower your payment, but don’t forget the smarter choice can sometimes be to leave your payment about the same but go from a 30-year term to a 20 or 15-year term. 

Note: If you look into refinancing with a big bank, you will likely experience significant delays in underwriting and pay higher fees. The timeline and costs quoted above are representative of what a specialty company like Fountain Mortgage can do.