If you own a home, there’s a good chance that the associated loan payment is your largest monthly expense. So, it might surprise you to learn that 27% of homeowners don’t know their current mortgage interest rate.
That finding from a recent Bankrate survey is likely to raise eyebrows, especially at a time when mortgage rates are tumbling and millions of homeowners could save big money by refinancing their loans.
Bankrate surveyed nearly 1,400 homeowners — including about 800 currently making mortgage payments.
At the time the survey findings were released, the average interest rate on a 30-year-fixed mortgage was around 3.7%, Bankrate says.
Yet, 43% of poll respondents said they were paying 4% or more — and that doesn’t include the 27% who didn’t know their rate. According to Bankrate, these mortgage holders are potentially paying a high price.
Mark Hamrick, Bankrate senior economic analyst, says:
“With the prospective reduction in monthly payments, the savings could be better put to use including toward retirement or another worthy financial goal. Here’s where what you don’t know can hurt you, costing you money.”
So, it’s obvious that a lot of folks should consider refinancing — potentially about 7.8 million homeowners, according to Bankrate, which cites data from data and analytics firm Black Knight.
However, if you don’t know your current mortgage rate, you probably aren’t aware of the opportunity you are missing.
Should you refinance your mortgage?
Even though rates are tumbling, not everyone is a good candidate for getting a new home loan.
As we have noted in the past, there are situations in which a mortgage refinance might not make sense, even if you could potentially get a lower rate. As we reported in “How to Refinance Your Home Loan“:
“Refinancing to a lower rate lowers a monthly mortgage payment. But it only makes sense if the month-to-month savings exceed the cost of refinancing. In short, don’t do it unless you’ll stay in the home until you’ve saved more from the lower rate than you paid in refinancing fees.”
In addition, some households may have a difficult time qualifying for a new home loan. You can learn more about this problem from Money Talks News founder Stacy Johnson by checking out “Why Can’t I Refinance My Home?”
If you do the math and find that you are a good candidate for refinancing — and you think you will qualify for a loan — check out Money Talks News’ Solutions Center. There, you can search for the best mortgage rates that are available where you live.
Have you refinanced your mortgage lately? Tell us why you took the plunge in comments below or on our Facebook page.