Potential refinance candidates remain on the sidelines

While mortgage lenders say the refinance boom is over and it’s time to focus on new purchase loans, new data from Fannie Mae found there are still plenty of potential “refi” candidates.

Fannie Mae, the largest player in the nation’s secondary mortgage market, recently conducted two surveys to find out why nearly half of homeowners who are eligible to refinance their homes have not done so.

The agency pointed out these borrowers could secure a lower mortgage interest rate, thereby lowering their monthly payments. Still, Fannie Mae found that only 25 to 30 percent of owners said they had refinanced in the past three years as mortgage rates decreased to record lows.

Researchers reported that many borrowers faulted “high closing costs.” Another refinancing barrier among borrowers was from 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.