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People have been refinancing their homes for many different reasons in the last few years. The pandemic made many people lose a large amount of income, and many people ended up in serious debt when everything started to return back to normal, which has led to many cities seeing a significant rise in refinancing. If you want to know a bit more about this, keep reading to answer the question, “why are mortgage refinance applications rising in these cities?
What is mortgage refinancing?
Refinancing your mortgage means that you agree to new terms of your payment plan to make it easier for you to handle. Many people choose to do this to consolidate all of their debt or use their existing equity to increase the amount of money they have borrowed.
People often use this extra money to add improvements to their homes which can add value over time. This is a great way to use the equity you have built up from making your payments on time. You can also choose to refinance if you need to make your payments smaller, but this can sometimes come with a penalty.
Which cities have seen an increase in refinanced mortgages?
Become an Insider
The country had historic refinancing rates within the last few years due to the pandemic and low mortgage rates. Many people needed the extra money during work outages, or they wanted to make their rate a little more manageable, so they chose to refinance while the rates were much lower than they are today. Let’s look at a few of the major areas and cities where refinancing has become popular in the last couple of years.
One in three homeowners has refinanced their mortgages in Provo, Utah, within the last few years. This rise in refinancing could be due to the rising cost of living that has hit many different places all over the country. Utah is typically seen as a very prosperous state, but many of the larger corporations and entities in the state took a large hit during the pandemic, and it has become almost impossible for some to make their regular payments.
Arizona has seen a large increase in population, but it has also seen a huge rise in the cost of living. It has become difficult for many people to get essentials like gas or groceries at an average price which has led to many people refinancing to save a bit of money on their mortgage payments. Many people are choosing to move to larger cities like Phoenix and take advantage of the great job opportunities and low cost of living.
In Beavercreek, Ohio, mortgage refinance applications have been on the rise in recent months. With interest rates still relatively low by historical standards, now is a great time to lock in a lower monthly payment.
For those who are looking to buy a new home, refinancing can also be a way to free up some cash for a down payment or other expenses. And with home prices rising, it’s important to get into the market sooner rather than later.
Beavercreek real estate broker Don Shurts says, “If you’re thinking about refinancing your mortgage, be sure to shop around and compare offers from multiple lenders.”
San Diego, California
San Diego is a city that relies heavily on tourists or visitors throughout the year that comes to see the beautiful sites and experience the incredible culture. The COVID-19 pandemic hit many metro cities hard, and San Diego was one of them. While they may be doing a great job of returning to their normal economic level now, the area saw about 28% of its homeowners refinancing in 2020.
Ocean City, NJ
Another popular tourist town that has seen a rise in refinancing is Ocean City, New Jersey. The area lost a huge percentage of revenue in 2020, which made many businesses struggle to stay open. Around 25% of homeowners refinanced their mortgages for a different rate that year which likely means they needed some quick cash or they needed to renegotiate their current payments.
Colorado Springs, CO
Colorado Springs has grown by about 15% in population during the last decade, which means that homes have started to become limited. When home prices rise, many people choose to sell to make sure they are getting the best deal possible for their home, but others choose to refinance and take advantage of the low mortgage rate instead. This could be one of the reasons that colorado springs saw 24% of homeowners refinancing in 2020.
There are so many places all over the country that have seen a huge increase in refinanced mortgages. You also need to keep in mind that the data reflected only tracks approved applications, and there are likely other cities that have a large number that are not approved for various reasons. You should also note that some mortgages were actually refinanced more than once in the same year, which showed that many people are struggling to afford to live in these cities. This data can be helpful in so many ways, so keep this in mind when you are looking to buy or invest in a new home.
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