If you don’t mind, let me beat a dead horse.
Mortgage rates are at or near record lows and you could save a ton of money by refinancing your mortgage.
There. I won’t say it again because I know how cliché and annoying it is to talk about how much money you could save by doing “X.”
The funny thing is I tell my family the same exact thing, though they don’t bother looking into refinancing either.
They bring it up to me here and there, but don’t do much beyond that. And you can only tell someone something so many times before you give up.
Perhaps this explains why there are millions of homeowners out there with mortgage rates well above current rates that are indeed “refinanceable.”
Update: I finally convinced my sister to refinance and she’s savings hundreds every month. She has since thanked me repeatedly and told me she should have done it sooner. Better late than never! We all procrastinate, especially when it’s something as awful sounding as a mortgage.
Don’t Have the Time to Refinance?
For some reason, most folks I know haven’t bothered looking into a refinance. Maybe they don’t have any spare time to do so? Or it could be that the task is seemingly so daunting that they avoid it altogether.
It’s kind of like putting off a dentist appointment, but continuing to endure the pain every day, or only chewing with one side of your mouth.
The reasons are probably endless, but it still blows my mind that more homeowners don’t take action, considering “how much money you can save!”
It could just be that it sounds so darn “sleazy” to refinance, given all the negative attention the mortgage industry has received over the past five years.
So, how many homeowners are actually missing out on this opportunity to save potentially hundreds per month and thousands over the life of the loan?
Well, a couple months back, a company by the name of CoreLogic noted that some twenty million borrowers with positive equity, or 53 percent of all “above-water borrowers,” had above market mortgage rates.
They defined an above market mortgage rate as 5.1% (or higher), which is more than a percentage point above current rates for the popular 30-year fixed-rate mortgage.
Pretty surprising, no? I thought the number was high, considering all the news about the “record low rates” that seems to permeate the airways these days.
But no, many of us still don’t bother, and instead continue making inflated monthly mortgage payments year in and year out.
All that said, it doesn’t make sense for everyone to refinance all the time. Like anything else in the world, it can be a good or bad deal, depending on your unique financial situation and future plans.
On top of that, it’s a lot more difficult to actually get approved for a refinance these days, so it’s not the slam-dunk it was back during the boom. See 7 reasons why you can’t refinance your mortgage for more on that.
But if nothing else, you should at least look into refinancing your mortgage if you haven’t lately. Rates really have come down a lot, and there’s a decent chance you’re one of the lucky 20 million homeowners out there who stands to benefit.
Heck, there are few other things in life you can do to save so much money so easily, even if the process does seem painful and daunting.