Nearly three-quarters of American homeowners may be making a big — and costly — mistake by not refinancing their mortgages.
A Bankrate survey finds that 74% of homeowners with a mortgage that they obtained at any point prior to the COVID-19 pandemic have not refinanced their loans.
That decision likely has been costly for many, because mortgage rates have sunk to all-time lows at various times since the pandemic began in early 2020.
In a Bankrate story accompanying the survey findings, Greg McBride, the company’s chief financial analyst, says:
“Cutting the monthly mortgage payment by $150 or $250, possibly more, can create valuable breathing room in the household budget at a time when so many other costs are on the rise.”
The Bankrate survey included 1,041 people with a mortgage.
The survey found that 32% of homeowners who had not refinanced believe — probably mistakenly — that they would not save enough money with a new home loan and cited that fact as a reason for not refinancing.
Closing costs and fees have kept 27% of respondents from refinancing, the second-most common objection. However, Bankrate notes that today’s rock-bottom rates are more than enough to make up for closing costs in many situations.
The third-most commonly cited reason for skipping a refinance was the amount of paperwork that is necessary for a new home loan — 23% of respondents said a dread of paperwork keeps them wedded to their current loan.
McBride’s response to this last excuse cuts to the quick: “Isn’t saving $30,000 over the next decade worth devoting a few hours of your time?”
How to find the right home loan
If you want to trim your monthly mortgage payment, now is a great time to consider a refinance. As McBride says, “Today’s rates are at levels unseen prior to last year.”
Ready to take the plunge? Stop by the Money Talks News Solutions Center and search for a great mortgage refinance rate.
For more tips on refinancing, check out “How to Refinance Your Home Loan.”