March 25th, 2020 11:06 AM by Jackie A. Graves, President
homeowners are leaving a ton of money on the table, as mortgage rates plummet.
rates are now hovering near all-time lows, causing a spike in refinancing in
January. Yet while many Americans are rushing to cash in, reducing their
monthly payments and the amount of interest they’ll pay over the life of the
loan, millions of others are paying above-market rates.
mortgage now runs about 3.7 percent nationwide, but the average borrower is
paying 4.41 percent, a new survey
from Bankrate reveals. That difference leaves a potentially huge
opportunity for homeowners to refinance and save thousands on their loan.
astounding, however, is that about 27 percent of borrowers don’t know what
their mortgage rate is, according to the Bankrate survey. Overall, about 7 in
10 borrowers are paying above the current average interest rate or don’t know
what they’re paying.
7.8 million homeowners have the opportunity to refinance and save money,
according to data from Black Knight, a mortgage analytics company. Figure how
how much you could save with this mortgage
The savings opportunity is huge
potential to refinance and save is significant, especially if you own a home in
one of the larger metro areas, where home prices are typically much higher.
PAID @ 4.41%
PAID @ 3.71%
New York City
potential savings on a maximum conforming FHA loan for the most expensive
cities surpasses $100,000.
for FHA loans in highest-priced cities, including New York, Los Angeles and San
Francisco, is $765,600. Homebuyers in these locales would save more than
$111,000 over the life of a 30-year loan if they moved from 4.41 percent to
3.71 percent, the current average rate.
Chicago, the FHA limit is about that of the highest tier, at $368,000.
Correspondingly, the interest savings of moving to the current average interest
rate is about half, at $53,659.
major metros, such as Houston and Atlanta, had comparable FHA loan limits as
Chicago, and offered similar loan savings, at $48,374 and $58,521,
the Poughkeepsie-Newburgh-Middletown area saw its FHA loan limit slashed in
half in 2020. A new 30-year loan at current average rates would save nearly
Find a great mortgage rate
mortgage rates at near-historic lows, you’ll want to run the numbers to see if
it makes sense for you to refinance into a cheaper option. But if rates
continue to slide, it’s going to be harder and harder to justify staying in
your higher-priced mortgage.
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