It has never been easier to refinance a home mortgage, yet 74% of homeowners haven’t refinanced since the coronavirus pandemic began.
Mortgage refinancing rates have been historically low since the beginning of the pandemic. Refinancing a mortgage is a sure way for homeowners to reduce monthly payments and ultimately save more money. Why then are so many electing not to refinance?
“Despite the fact that rates are once again hovering around all-time historic lows, many people have been lulled into complacency because of low rates over the past few years. This is unfortunate as many will miss out on one last chance to refinance and save money, as interest rates may very well move higher,” says Jason Wooten of First Rate Financial.
According to a recent study, the top three reasons that people cite for not refinancing are (1) they wouldn’t save enough money, (2) closing costs are too high, and (3) there is too much paperwork.
Here are three ways to overcome these hesitations:
1. Save money in the long run: To be sure, many homeowners have already refinanced and aren’t interested in doing it again. Call it “refinance fatigue.” Also, some believe refinancing wouldn’t be worth the expense: 32% don’t see the math adding up.
But earlier this year, one study found that at a 30-year fixed rate of 2.88%, close to 17 million homeowners could save an aggregate of more than $5 billion — just over $300 a month per homeowner.
Said Pat Fox, a senior loan consultant for Caliber Home Loans: “Most people don’t understand the math. They only look at the rate. They don’t understand the real power of cumulative interest savings over time. When I speak to a client, I not …….