Since spring of 2013, the number of home owners refinancing to lower interest rates has dropped dramatically, but according to a survey release Tuesday, people who refinanced their home in the third quarter will see about $6 Billion dollars worth of savings over the next year alone that can be used for better things, like paying down credit card or student loan debt – or just to put into savings.
So why are more people not refinancing?
The rest appear to not be doing it because they either can’t because of poor credit or other approval hurdles, or they simply think they can’t – but have never tired.
The think they can’t refinance but have never tried group is clearly missing out.
Many who think they can’t, think that because their homes have lost value. But with programs like HARP (Home Affordable Refinance program), FHA Streamline Refinance Program, and the VA Streamline Program (also knows as an IRRRL Loan), the vast majority of people can. Never assume you can’t. Pick up the phone or surf over to your local mortgage brokers web site. It only takes a few minutes to determine if you can refinance, and if you do, what are the savings.
Advantages of refinancing
The obvious big advantage is lowering your monthly mortgage payment. But there are other significant advantages like paying off other debt, or shortening the term of you loan to pay it off earlier. According to recent reports, an amazing 37% of homeowners shortened the remaining term of their loan.
At the moment, 15-year fixed-rate loans averaged around a full percentage point below 30-year loans. That is a big incentive all by itself. But many people are wanting to go into retirement house payment free, and realize that the low rates on shorter term loans helps them achieve that goal.