Refi is dead. Can you switch gears?

Interest rates are rising for the first time in a long time...and it’s bringing refinances to a screeching halt. Nearly a decade of rates parked at “historic lows” made the refi a solid bet for many homeowners - and also a sizable chunk of many lenders’ business.

With rising rates, however, the refi often no longer makes sense for consumers, and the market has shifted accordingly. According to the MBA, refi application volume is now at its lowest rate since December 2000. The origination market is now dominated by purchase originations, with construction and HELOC loans also gaining share. “Dead” might be hyperbole, but refis definitely seem to be settling in for a long sleep.

Say you’re a lender who recently rolled out a a new digital mortgage experience optimized around your business focus...and at the time, your business focus was refis. What does that mean for you now?

Well, if you’re a Roostify client, it means you’re actually doing fine.

We like to talk about how Roostify is designed as a platform, not just a pretty front-end system, in order to be flexible enough to adapt to your future needs. This is exactly the kind of situation where the platform approach pays off. Roostify clients have had the luxury of adjusting their strategy without worrying about built-in constraints in their digital mortgage system, and without disrupting the unified loan experience they offer their clients.

In fact, a number of our clients are doing just that. As the shifting market makes HELOC more attractive to homeowners than refi, our lender clients are using the tools that already exist in the platform to create what they need to service this increased demand.

We know that the “cash out” refi is not going to be relevant in this increasing rate market but a HELOC is a great alternative. We are grateful that we didn’t have to look for a completely new solution but could configure our current Roostify account to accommodate our HELOC team.
— Jan Valencia, Residential Mortgage Systems/Project Manager, KS StateBank

One of our most popular features is the ability to create and manage distinct environments with just a few clicks. This makes it easy to manage multiple brands or channels - for example, a lender who uses different names in different states can set up and manage a fully-branded loan experience for each name, right from the admin console.

However,  our clients have also starting using this function to quickly set up specific environments and workflows for HELOC applications, without disrupting their existing mortgage applications. This has proven especially useful when lender HELOC teams are a separate line of business with different business processes and reporting metrics.

A recent real-life example comes from KS StateBank, one of Roostify’s early adopters and innovation partners. Jan Valencia, Residential Mortgage Systems/Project Manager at KS StateBank, used the multiple-environments feature to create a unique sub-account configured to work for their HELOC business. This enabled KS StateBank to run HELOC-specific marketing campaigns, with unique URLs that took consumers directly to the specially-branded HELOC experience. Not only does this make it easy for KS StateBank to manage their business, it makes life easier for their customers, who are able to use the single system to meet all their home lending needs.

"We know that the 'cash out' refi is not going to be relevant in this increasing rate market but a HELOC is a great alternative,” said Valencia. “We are grateful that we didn’t have to look for a completely new solution but could configure our current Roostify account to accommodate our HELOC team."

That’s exactly what we like to hear from our clients. We’ll keep on making sure we offer lenders a robust platform that keeps up when they need to shift gears, with a solution design process that helps integrate into the business processes that are right for them. Together we can arrive at a better experience for consumers, and a high, sustained lender ROI.