Lenders can leverage and strengthen their existing relationships by developing a portfolio retention strategy that includes a streamlined refinance program.

At a time when consumers are laser-focused on their finances due to concerns related to market volatility, inflation and recession speculation, the prospect of lower mortgage rates and monthly payments holds great promise. Borrowers — particularly those who took out loans when the 30-year fixed rate was 7% or higher — are poised to pounce on the opportunity to refinance at any sign of meaningful downward rate movement. We saw them do exactly that this past fall, producing a refinance surge that some experts believe could happen again in 2025 – especially if rates dip to 6% or lower.

The 2025 ServiceLink State of Homebuying Report backs up these beliefs with evidence of homebuyers’ openness to refinancing their loans this year, with three out of five homebuyers (60%) saying they would be likely or somewhat likely to refinance in 2025 if market interest rates moved favorably. And securing a lower interest rate is just one of the reasons they said they would consider refinancing their mortgage loans. When asked what might motivate them to refinance this year, respondents shared the following:

- 33% would refinance to get a better mortgage rate

- 17% would refinance to pay down debt

- 17% would refinance to borrow additional funds

- 17% would refinance to change the term of their loan

- 15% would refinance to make home improvements

- 11% would refinance to switch to another loan type

It’s worth noting that borrowers who are closing in on their 20% equity mark may also be pursuing refinancing to remove PMI from their loans more quickly. They’re looking to move into a loan with a smaller balance, at a lower rate, to reduce their monthly payments and build equity faster.

The vital role of portfolio retention in mortgage lending

With so much borrower interest in refinancing in 2025, lenders with a strong portfolio retention strategy and a streamlined refinance program have the opportunity to not only build volume but also give their established customers a fresh reason to stay with them. In many cases, homeowners are just waiting for a gentle nudge — a slight drop in rates or a special offer from their lender — to pull the trigger on refinancing. It’s an ideal time for lenders to look into their loan portfolios and identify eligible refinance prospects.

“Lenders know it costs less to recapture a customer than to acquire a new one. That’s why a strong lender retention strategy is essential right now,” says Jim Gladden, senior vice president, strategy and retention, ServiceLink. “As we watch various market indicators — the federal government’s policies, the 10-year Treasury yield and the Federal Reserve’s actions, for example — we see the potential for increased refinance activity this year. The lenders who stand to gain the most from these opportunities are those who are prepared to reach out to their borrowers with refinance incentives and then provide them with a streamlined refinance experience.”

Lenders’ own predictive analytics offer insights that enable them to proactively identify borrowers within their portfolios who may be eligible for refinancing, Gladden adds. “Lenders have information related to loans in their portfolio such as income, LTV, DTI, credit quality, payment history and other information. The one missing piece is updated title information. Before they begin their outreach, they should be informed as to whether anything has changed material to title since the loan was last originated.”

ServiceLink offers a solution to fill that gap.

Title solutions for refinancing

Without transparency into the title status of refi prospects, lenders may run into unexpected issues that stand in the way of a quick close — perhaps a judgment has been filed against a borrower or a second lien on a property eats up some of the loan-to-value ratio. Having this information prior to offering the customer special pricing or another incentive is critical.

ServiceLink can provide title complexity analysis and scoring that categorizes titles so lenders can more easily identify strong prospects for quick-close refinances:

- Level 1: Instantly clear to close; no material defects

- Level 2: Clear to close in five days or less; minor title variances require some title curative

- Level 3: Clear to close in five days or more; major variances require in-depth title curative

“Adding this extra piece of transparency and reliability for the lender gives them the assurance that the list of borrowers they are selecting for outreach are the very best prospects,” Gladden says. “We are suggesting to our lender partners that before the next significant rate dip occurs triggering a refi wave, they prepare by bumping their target list up against our data so we can give them an indication of the quality or condition of title and the readiness for an immediate close.”

How lenders can streamline mortgage refinance processes

With internal analytics and current title information in hand, lenders are prepared to move swiftly in contacting high-potential borrowers when the market shifts into refi gear. Those who accept their refi offer should be able to expect a fast and smooth process. Tech-enabled title and closing options facilitate that process and can be essential to any successful home equity and refinance strategy.

Gladden explains, “ServiceLink’s title data, complexity score and instant title capabilities facilitates a streamlined process that will benefit lenders. Real-time scheduling enables a lender the ability to lock in a closing date/time and available signing agent at the point of sale. A full suite of closing options to accommodate lender and borrower preferences including eClose solutions, remote online notarization (RON), in-person electronic notarization (IPEN), hybrid and in-person signing options ensure an easy, efficient, elevated borrower experience. With the expectation of rate dips and refi booms in the offing, this combination of tools sets lenders up for success.”

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