As of February 2015, there were about 7.1 million potential refinance candidates. In February 2014, about 4.1 million borrowers were found to be able to benefit from refinancing their mortgage, according to Black Knight Financial Services’ research.
“Through a combination of declining interest rates and increased equity among borrowers driven by home price increases, an additional three million borrowers now meet the same broad-based eligibility criteria as compared to one year prior,” says Trey Barnes, Black Knight’s senior vice president of Loan Data Products. “Of course, this population is rate-sensitive; in fact, it was largely the decline of 60 basis points in the prevailing 30-year interest rate that resulted in the year-over-year increase in potential refinance candidates.
Researchers also found that lower credit score borrowers – those with credit scores below 620 – are refinancing at the lowest level on record. “As a result, the average loan age for this group is 98 months, as compared to just 38 months and less for borrowers with credit scores of 750 and above,” the report notes.
Source: Black Knight Financial Services