After plunging the economy into chaos last year, COVID-19 marked the lowest mortgage rates ever, and the times of ultra-low rates are not over yet.
Interest rates on 30-year mortgages increased in the spring as the introduction of the vaccine gave investors confidence of a recovery. Now that the Delta option is raging, rates are falling again.
The recent downturn has opened up more opportunities for homeowners to refinance their mortgages and cut your monthly payments and lifetime interest expenses. Some 14 million mortgage holders will see significant savings by taking out a new loan, according to a new study.
Typical savings on refinancing: around $ 300 per month.
Betting on 30 year fixed rate mortgage currently averaging just 2.88% – up from an April high of 3.18% and close to a historic January low of 2.65%, according to a long-term study by mortgage giant Freddie Mac.
At current rates, about 13.9 million US homeowners are in a favorable position to refinance and could significantly reduce their borrowing costs, according to an information and technology company. Black Knight reports MoneyWise.
Together, today’s refinancing candidates can save $ 4.05 billion a month through refinancing, which is an average savings per borrower. $ 293 per month…
Do you think this is good? Black Knight Says 1.7 Million Of These Homeowners Can Save A Month Per Month USD 740 through refinancing. The company said its data include millions of homeowners who have already refinanced amid the pandemic.
How to know if you should
Despite the stunning mortgage rates last year and huge potential savings, many homeowners seem to have chosen to delay rather than refinance. BUT recent study by Zillow found that 78% had never traded their loans in the past year.
Want to take the refi train? Black Knight considers you a good candidate if:
You have a 30-year mortgage with an interest rate that you can reduce by three-quarters of a 1 percentage point through refinancing – for example, from 3.75% to 3% or higher. You can meet these criteria if your current mortgage is less than two years, because the 30-year fixed rate mortgage averaged 3.72% in early 2020.
Your credit rating is from good to exceptional – at least 720. If you haven’t looked for a long time, today it is easy take a look at your credit score for free…
You have at least 20% equity in your home, which means you have paid 20% or more of the home’s current market value.
Why Refinancers Should Act Fast
Homeowners who could refinance and reap savings may not waste a lot of time.
Experts say mortgage rates are bound to rise as the economy improves and the Federal Reserve starts raising interest rates again. The Fed has indicated it will likely do so in the second half of 2023, although some analysts say the central bank is likely to take steps earlier if it needs to lower inflation.
If you have been on the verge of refinancing and are thinking about taking a step forward, check rates from multiple lenders to find the best deal for your area and for the person with your credit profile.
You may find yourself an ace in comparison shopping – a handy talent that can help you save on homeowner insurance as well. When your policy is renewed, get multiple quotes to see if another insurance company offers the same coverage as yours but at a lower cost.