Nearly 4.5 million borrowers are eligible to refinance and could lock in savings on their monthly mortgage payments but have not taken advantage, according to a new report from Black Knight Financial Services.
The average borrower stands to save $260 a month. Nearly 700,000 borrowers could save $400 or more per month, the report shows.
“The recent pause in the upward movement of interest rates continues to encourage late-to-the-game borrowers to refinance,” says Lynn Fisher, the Mortgage Banker Association’s vice president of research and economics.
But many owners are not refinancing, despite the potential savings.
“Our data doesn’t tell us about motivation,” says Ben Graboske, senior vice president of data and analytics at Black Knight Financial Services. “It leaves us to surmise that the reason is apathy, lack of awareness, and education.”
Some homeowners may still be underwater on their home loans, owing more than what the home is currently worth. Other owners may have a low credit score that is blocking them from taking advantage of lower rates.
Still, owners likely will have more time to take advantage. “I don’t think this will be the last opportunity [to refinance into a low rate], but I don’t have a crystal ball,” says Graboske. “There are enough pressures in the market—lenders getting more efficient—that we’re going to have competitive rates around for awhile.”
Source: “Reason to Refinance: 4 Million Homeowners Are Leaving $1 Billion on the Table,” CNBC (June 22, 2017)