American homeowners could collectively save up to $1.66 billion a month by making one key change, according to an industry report.
That change is refinancing their mortgages, says Black Knight Financial Services’ latest Mortgage Monitor Report, which is based on data as of the end of May.
The report found that, between traditional refinancing programs and the federal government’s Home Affordable Refinance Program (HARP), more than 6.5 million borrowers probably could qualify for and benefit from refinancing.
Ben Graboske, senior vice president of Black Knight’s data and analytics division, says in a press release that by examining interest rates on existing 30-year mortgages and applying “broad-based underwriting criteria,” Black Knight found that about 6.1 million borrowers are good candidates for traditional refinancing.
An additional 450,000 candidates meet guidelines for HARP.
Graboske continues:
“For both groups, the potential monthly savings could be substantial. Some 550,000 American homeowners with a mortgage could save $500 or more each month by refinancing at today’s rates. Over 3 million could save at least $200 per month.”
That amounts to about $1.5 billion per month through traditional refinancing and $1.66 billion with HARP-eligible borrowers included — or almost $20 billion per year.
Graboske notes, however, that the qualifying population is rate-sensitive:
“If rates go up just half a percentage point, 2.6 million people fall out of that refinanceable population.”
Other findings from the May report include the following:
States with highest percentage of noncurrent loans:
- Mississippi
- New Jersey
- Louisiana
- New York
- Maine
States with the lowest percentage of noncurrent loans:
- Montana
- Minnesota
- South Dakota
- Colorado
- North Dakota
To learn more about mortgage refinancing, check out “The Time to Refinance Your House Is Right Now” and “Ask Stacy: What’s the Best Way to Pay Off My Mortgage Early?”
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