While interest rates continue to decrease, the number of homeowners who have decided to take advantage of this and refinance their homes has actually decreased. With interest rates now hovering around 3.5 percent, many would have expected homeowners to jump at the chance to lower their monthly payment. However, a report from the Federal Housing Finance Agency (FHFA) shows that the number of homeowners who are applying for refinance has actually decreased by ten percent from the last quarter of 2015.
Black Knight Financial Services has pointed out that there are currently over seven million homeowners who qualify for refinancing, with over half a million eligible to save over $400 every month. That does not count the number of homeowners who qualify for the Home Affordable Refinance Program, the government program designed to combat the housing crash. Then there are many owners who can take advantage of either the VA or the FHA Streamline Refinance options. Overall, if all of these homeowners were to refinance, the combined savings would be over $2 billion dollars every month.
Those who have taken advantage of refinancing have saved a good amount of money each month – most saw a reduction of their monthly mortgage payment of at least $150. By taking advantage of zero-closing cost mortgages, there’s very little upfront money. Others who elect to do a debt consolidation can save more.
With guidelines continuing to loosen and interest rates below 4 percent, many experts are urging homeowners to refinance now before this window of opportunity closes.