Despite the media, this is NOT a refi. market!

People may think I'm crazy, but I am still focusing the bulk of my attention on purchase business! While refinancing into a lower rate looks and sounds great at first glance, all too often in our declining Michigan market, it is not realistic- most callers we see who inquire about refinancing simply don't have enough equity (if they have any at all) to refinance. In the early 2000s when the refinance boom happened homes were going up in value rapidly. A family could wrap in closing costs and new escrow accounts and still have equity left over, and it would work. Now, unless you originally purchased with 20% down and barely borrowed against the home, the chances are good that you owe too much to refi. In many cases (dare I say most) people bought with low down and then borrowed against their home, so now they owe more than it's worth. So, unless a client wants to bring in several thousand dollars as cash to close (again, there are often closing costs and the need to replenish escrows) then it doesn't work.

And then I think to myself? Do we really want to start this brutal cycle all over again anyway? Haven't we learned that when people rolled all this money into their new loan that we weren't doing them any favors and likely stripping them of the little equity they had?

The exception would be, if you have a person who does have equity and you can pay the closing costs for them, they bring in their escrow monies (rather than wrapping it into the new loan), and they replenish those funds post close when they get an escrow refund from the mortgage company/servicer that was just paid off.

If you or your client are in that boat, a refi. might be worth exploring.

In the meantime, there are plenty of great deals out there to be had in the purchase market to keep us hopping!