Fannie Mae recently conducted two surveys to find out why nearly half of home owners who are eligible to refinance their homes have not done so. Here’s what they found:
Fannie Mae found that only 25 to 30 percent of home owners said they had refinanced in the past three years as mortgage rates decreased to record lows.
Fannie Mae researchers found that borrowers identified some of the biggest barriers to refinancing as they “tried to refinance but have been unsuccessful.” Others reported that they did not have enough in savings, while still others faulted “high closing costs.” They found another refinancing barrier among borrowers was from perceived situational factors—such as the relative size of the original and remaining mortgage principal and the number of years expected to remain in the house.
Researchers discovered that those who do refinance tend to do so due to “life cycle” factors, such as years of home ownership, and certain demographic factors.
It will be interesting to watch whether refinances pick up among homeowners going forward as the housing market continues to improve.