A recent study by TransUnion shows consumers with prime or better credit status, about 85 to 90% of homebuyers, are 2 to 3 times more likely to open a new auto loan or credit card account within 12 months of obtaining a new mortgage.

The study looked at 16.7 billion consumers for 2.5 years, paying off mortgages and starting new ones in the six months before and after, Wise said.

The study, while showing some expected data, also held some surprises, said Charlie Wise, TransUnion vice president of the innovative solutions group, in an interview with HousingWire.

“Is conventional wisdom true, or is it distracting? I think this study showed a little of both,” Wise said.

The study showed that many of these consumers opened their new car or credit card loan even as soon as one month after withdrawing the mortgage. This quick turnaround is due, it part, to pent up demand, Wise said.

“This finding is important, both because it quantitatively confirms the conventional wisdom and because it illustrates how necessary it is to look across products to get the full picture of consumer credit behavior,” said Ezra Becker, co-author of the study and senior vice president of research and consulting for TransUnion.

What TransUnion didn’t expect, however, was the finding that spending actually increased right before the new mortgage transaction was completed.

Looking closer at the data, however, showed that consumers who increased spending were the ones who were taking out a mortgage, as opposed to those who were refinancing, Wise said. That’s when it became clear. Many were spending on moving, closing costs, repairs or renovations to the house, or even new furniture that would all need to be spent before consumers took out the mortgage.

Refinance consumers, however, were the opposite. They increased spending after the mortgage loan is withdrawn.

Many times after refinancing, homeowners pay a lower mortgage payment, and use the money to give themselves a raise, Wise said. Spending increases due to the flexibility that refinancing created.

Wise said the extra spending is normal and even necessary, and that having more options is better for the consumer.