Part 1: Refinance Market: Challenge vs. Opportunity
Today, the refinance market is challenging industry professionals everyday. The beginning of 2013 showed signs of a high rate market, but we face it even more today. However, despite the apparent challenges, the market remains open with opportunity; opportunity that should be capitalize on by marketers. In this two part series, we discuss two opportunities that exist in the current rate environment we seem to be facing. We’ll touch on ways you can use the ‘challenge’ to grow substantially with your business.
Today’s rates are higher; however, they still haven’t reached the point of being too high for many consumers. Earlier in the year, consumers could get a 30-year fixed mortgage for rates as low as 3.5 percent. Now, rates are 100 plus points greater, so its natural you would think the market would be drying up. Not to mention, mortgage applications have dropped over 50 percent since the rate increase in May. These facts paint the ‘challenge,’ but we’ll dive deeper to show you the light at the end of the tunnel.
Refinance applications are still accounting for almost 60 percent of all mortgage applications today. With that said, lenders cannot afford not to target these consumers in the refinance market. The problem is trying to figure how to balance your efforts between mortgage and refinance applications. Of all homeowners in the USA, 46 percent have not refinanced in the past 24 months. Homeowners are not taking advantage of the historic low rates available. Of those same individuals, 66 percent have not refinanced in the past two years, and they have FICO Scores above 660. What this means…one in three homeowners should be taking advantage of the low rates available, but these individuals are non sub-prime, low credit borrowers. They stay on the sidelines out of fear of initiating the process. The reason these consumer are not applying is not because they already pay a low rate; instead it’s the opposite. Most of them, close to 49 percent, are paying 5 percent more every year.
This evidence proves that this segment of consumers should be refinancing, but aren’t for various reasons. This is a perfect opportunity to target them with new offers and show them how you can save them money. Rates will continue to rise, which means your marketing efforts need to be more strategic and innovative. Strong content, relevant messaging and compelling offers can bring these consumers off the sidelines and back into the refinance market game. It’s not too late to capitalize on this opportunity.
Titan List is a full service Advertising and Design agency specializing in Direct Mail,Mortgage Marketing, Search Engine Optimization and Website / Graphic Design. Titan List has been around since 1998, and has a team of highly qualified individuals with experience in the marketing trends that fit your business. Unlike other agencies that source their work out, Titan List & Mailing handles the entire campaign in-house. Looking for a special list of data for your business? We can customize any data list for your company.
