Two Million Homeowners Squandered the Chance to Save by not Refinancing Their Homes!
The sages themselves have quipped that a stitch in time saves nine.
Indeed, these guys knew their stuff because financially, the act of procrastinating can cost you tons of money
Missing out on Refinancing
Currently, mortgage rates have skyrocketed by a full percentage point above what they were at the beginning of 2018.
Consequently, this has led to the number of borrowers that could have reaped the benefits of a refinance this year reduced by a whopping 56 percent. Indeed, info released by Black Knight, an analytics firm, has confirmed this to be the case.
Additionally, the said borrowers also failed to capitalize on getting the average monthly savings of about $252.00.
Interestingly, a few years back when interest rates were at a record low, millions of borrowers had taken advantage of the situation and had promptly refinanced their mortgages, constituting in billions of dollars being saved in aggregate.
Now, millions of borrowers did not take advantage of the current atmosphere, and are now unable to see the same savings manifesting. That being said, since rates hit rock bottom in 2016, roughly 5.9 million borrowers were poised to take advantage from refinancing, and not a single one of them applied one.
For this year, it was estimated that 2.2 million could have benefited from refinancing, and unfortunately, now, they no longer can.
To retrieve such numbers, the report conducted a survey counting individuals that had a high chance of qualifying for refinancing, having at least 20 percent equity on their homes, and possessing excellent FICO scores!
$1 Billion down the Drain
According to Black Knightâ€™s executive vice president in charge of the data and analytics firm, Mr. Ben Graboske, it is estimated that over $1 billion in aggregate savings was lost by these individuals because of not refinancing early enough. Currently, roughly 1.9 million borrowers have a high probability of applying for refinancing and qualifying for it.
That being said, it paints a grim picture primarily because this is the lowest number ever recorded since 2008. Additionally, mortgage refinances applications have been falling steadily and are currently 32 percent less than what they were a year ago.
This is as per information released by the Mortgage Bankers Association.
A Skepticism of the Mortgage Process
According to Maryland-based Apex Home Loans CEO Craig Strent, he believes that there will always be instances where some individuals have a bad history with the whole mortgage process and might be a little more reserved about trying it for the second time. Indeed, they may also be unaware technology has eased the friction during the mortgage process for the last couple of years.
That being said, if interest rates persist with their rising trend, of which it is anticipated that they will, a smaller number of borrowers will not benefit in terms of their savings from any refinance. Indeed, not only will there be a lesser interest to refinance, but also a lesser interest to relocate from one place to another. Moreover, a large number of borrowers today have initially refinanced or already purchased homes at a much lower rate.
So for them to relocate, they would then have to exchange their significantly low rate for a much higher one. Indeed, higher rates are also making it much more expensive to afford a home.
Making the Best out of Refinancing
For example, data released by Black Knight shows that the interest payment and monthly principle required to purchase an average home has increased by $190 per month since the commencement of 2018, constituting an 18 percent increase.
According to Graboske, it now requires roughly 23.6 percent of the American median income to meet the monthly payments required for the average-priced home. This has resulted in housing being at its most expensive for the last 10 years.
Despite being slightly better than the 25.1 percent experienced from 1995-2003, Graboske still believes that the housing market is just about to topple over.
Indeed, in the beginning of the year, only the State of Hawaii and California were less affordable as compared to their long term averages.
Now, over 10 States have become unaffordable.
That being said, as price appreciation plummets, the prices of houses are still rising in quite a number of markets.
Unfortunately for most consumers, the trend of high prices together with increased interest rales will reduce the affordability of housing markets.
More in Refinance
You Can Now Be â€˜Cheaper By the Dozenâ€™ Actor Steve Martinâ€™s New Beverly Hills Neighbor! Hereâ€™s How
If silver-haired actor Steve Martin is anything like the goofy and loveable characters he’s played in movies like ‘Father of the...July 2, 2019
These Are The Two Lesser-Known Things That Make Up Jay-Zâ€™s Billion-Dollar Fortune
The beginning of June has been a good one for rapper turned businessman, Jay-Z. Not only has Forbes announced that his...July 2, 2019
Glenn Close is Selling Her Home of 30 Years — Check Out What the New York Farmhouse Has to Offer
Born in Connecticut and currently residing in New York state, veteran actress Glenn Close seems to be one of the few...June 30, 2019
This is The REAL Reason Why David Beckham Spent $50 Million to Buy a Company He Already Owns
Retired soccer player David Beckham is nothing short of a legend in the world of sports. His popularity also led to...June 30, 2019
UFC Fighter Conor McGregor is Changing His Ways and Copying LeBron Jamesâ€™ Spending Habits– Here’s Why
Mixed martial artist Conor McGregorÂ is currently among the highest-paid athletes in the world today– and he sure spends like one. From...June 23, 2019
Princess Dianaâ€™s Childhood Home Will Soon Be Open to the Public! Hereâ€™s What You Can Expect to See In the Spencersâ€™ Estate
Princess DianaÂ was one of the most beloved members of the royal family when she was alive. While her life was a...June 23, 2019
This NFL Star Has Business Skills as Strong as His Field Game– Here’s His Best Financial Advice
It’s no secret that professional athletes, especially those signed with teams like the New York Jets, earn good money. While star...June 23, 2019
Ariana Grande’s Ponytail Gets New Endorsement Deal!
Givenchy made a huge announcement last week Friday, and to be honest, everybody saw it coming. On Thursday, they revealed a...June 23, 2019
R Kelly Gets Deeper in Debt as Landlord Seizes Money From His Account
R Kelly’s Indebtedness R Kelly is an award-winning singer and songwriter. He is a record producer who has sold over 60...June 23, 2019