19.4 million homeowners could reduce their mortgage payment by an average of $ 309 per month
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The average interest rate on home mortgages fell to another all-time high last week, reaching the lowest level in nearly 50 years of follow-up. As mortgage rates continued to decline, the number of people who could benefit from refinancing increased.
In total, qualified homeowners could save $ 5.98 billion per month by refinancing, which is the highest amount in recorded history.
No less than 19.4 million homeowners could benefit from refinancing
Black Knight Reports 19.4 Million Homeowners Are ‘High Quality’ refinancing candidates.
To qualify as a “high quality” candidate, homeowners must have a credit score of at least 720, have 20% equity in their home, and be able to reduce their current mortgage rate by at least. 0.75% through refinancing.
According to the mortgage analysis company, the 19.4 million people who meet these criteria are the most high-quality applicants ever. And the savings these homeowners might realize are not a small amount either. In fact, they could save $ 309 per month or $ 3,708 per year on average.
Of course, these are just averages – and some could do even better. Black Knight data suggests that around 4.5 million borrowers could save $ 400 a month or more by refinancing now. And 2.7 million of them could reduce their monthly mortgage bill by more than $ 500.
Not surprisingly, the owners in places where property values tend to be higher are the most likely to save. There are over 3 million high-quality refinancing applicants in California alone, and Golden State residents could reduce their monthly bills on average $ 420. Florida has 1.4 million high quality refinancing applicants, followed by Texas with 1.3 million and New York with 1.1 million.
Less qualified applicants can still save money
Of course, borrowers with lower credit scores or less equity can still take advantage of today’s historically low mortgage rates. They may have a harder time getting approved and may not qualify for absolute rates. But current mortgage rates are lower than anyone might have imagined. High-quality applicants are the most likely to save money by refinancing, but few have mortgage rates as low as those available today.
Therefore, any homeowner who has not refinanced recently and is able to do so should compare the rates and terms of several mortgage refinance lenders. Getting quotes won’t affect your credit score, so see how a new loan might compare to your current debt consolidation.
Now you have to pay closing costs to refinance on a mortgage. As such, it is important to do the math to see how long it will take your interest savings to cover the upfront costs. If you are able to refinance and plan to stay in your home long enough to break even, there is no reason not to. You could end up with more money in your pocket every month.