What if we tell you that you could’ve capped savings of $3500 every year, but you missed it?
Well, you could have done that… had you refinanced your mortgage on time like millions of Americans did and saved billions of dollars in the process.
The latest study conducted by CNBC states that more than two million homeowners could’ve saved $250 every month and they missed it. Refinancing your mortgage at the start of this year would’ve been one percent cheaper than it is right now, and millions of Americans capitalized on this opportunity.
As for slow movers and procrastinators, they were too afraid to take the big step for greater good. Studies show that in 2016, 5.9 million people could’ve reaped the benefits of a house-mortgage refinance; but they didn’t apply for it.
For instance, out of 100 given homeowners, 56 of them missed out on the chance to save thousands of dollars because they were too late to act. The worst part is that the remaining 44 percent of homeowners are still unaware about what they’re losing out on.
There’s a good chance that every Homeowner in America received a letter/ email suggesting them a way out of troublesome mortgage problems, but they just didn’t go for it and found it too good to be true. If we look at the aggregate sum of savings these laggards missed on, it adds up to $1 billion.
It’s not that this is happening because they cannot qualify for a mortgage-refinance loan; there are 1.9 million people with good credit scores who could easily meet all the requirements, yet they didn’t pounce on the chance to save their hard earned money.
When the Federal Reserve tried its level best after the recession to lower the interest rates, their sole intent was the welfare of struggling homeowners who could’ve refinanced and made the most of these low rates.
But alas, millions of Americans chose not to capitalize on this historic opportunity to save money on the house mortgage. Not only did this hamper their personal finances, but it also resulted in an economic slowdown– hindering the process of economic recovery after the recession.
But time and tide wait for none- and the interest rates won’t stop scaling to new heights just because a million people were too lazy to make most of the lower rates. The intent to refinance on a home mortgage would dip even more, and homeowners won’t have a reason to move.
A hefty chunk of recent borrowers has already refinanced to homes with low mortgage rates or bought homes with record low-interest rates. If the laggards make a move now, they would have to trade their rock bottom rate for a higher rate.
The current high rates make the concept of affording a home even more costly. Walking into 2018, the monthly principal and interest rates rose by $190 per month, which is somewhat close to 18 percent for an average-priced place.
Housing is least affordable at the moment in the USA, and it can only get worse with market forces continuing to defy the laws of physics. While the prices of homes are appreciating at a slower rate than before, this relief is short-lived when you add up the elevated interest rates.
According to this research by Attom Data Solutions, house prices in the USA are rising faster than wages, sending the job market and house market in completely opposite directions. Shockingly, average wage earners cannot afford a house in 75 percent of local markets.
It looks like it can only get worse, and researches point the same way. House rates in the Bay Area, Brooklyn are the highest, while it would take just 13 percent of a homeowner’s income to buy a house in Michigan. It’s safe to say that your mortgage is way too much, irrespective of where you live.
What can you do? Well, you can weigh your options for a start. The way we see it, if you haven’t refinanced your home-mortgage yet and are still one of those lazy 2 million-something, it’s best to get on it ASAP.
You can look for financing options which in this highly competitive environment offer the best interest rates as yet. We’d recommend that you pay LendingTree a visit and browse the home-refinancing options you can get in accordance to your score sheet.
If you refinanced your home mortgage on time, full marks to you-you save thousands of dollars worth of money that you can put to better use, like a 401(k) plan.
Don’t lament on this missed opportunity if you didn’t– you can still save a few valuables from the burning house by refinancing before the next wave of peaking interest rates make it even harder. Check offers from LendingTree and take your pick!