Low mortgage rates have created a high number of homeowners who are eligible for refinancing, according to a recent report by Black Knight.
The report, which used comparison data from as far back as 2000, found that approximately half of all homeowners are currently paying .75 percent more than current rates, and around 11.7 million mortgage holders are eligible for refinancing to lower rates.
Current "refi-eligible" homeowners who meet certain lending criteria may want to take advantage of the current rates in the market.
There are many reasons why homeowners should consider refinancing. Here are five:
- Lower rates: Refinancing your loan while rates are low allows you to access current rates instead of the rates that were in effect when you first secured your loan. Additionally, if your credit profile has improved since you first applied for a loan, this can allow you to qualify for lower rates through a refinance. Lower rates mean lower monthly mortgage payments.
- Cash-out refi: If you choose a cash-out refinance, you can tap into cash from your home's equity. This may put money directly back into your pocket when you receive a check at closing. This amount will be added onto your loan's principle.
- Shorter loan terms: Refinancing from a 30-year fixed mortgage to a 15-year loan may not only help you pay off your loan faster by decreasing the length of the loan, but rates are typically lower on shorter loan terms. Because lower rates mean lower monthly payments, this can help you save money on interest throughout your loan.
- Predictable payments: When you have an adjustable-rate mortgage, your rates may fluctuate over time. It can be challenging to plan your financial future with the uncertainty of whether or not your mortgage payments will increase, but refinancing to a fixed-rate home loan will allow you to lock in your rate for the life of your loan.
- Removing co-signers: If you went into a home loan married and are now single, or if you needed a co-signer for approval, but no longer need them, refinancing will allow you to remove a secondary signer on your mortgage.
If you're interested in learning about your eligibility to refinance or want to learn more about how a refinance can benefit you, don't hesitate to reach out to our team today!