Mortgage rates have never been lower and yet many homeowners still have not refinanced their home. Why? Well, it is one of those answers...."Who knows?"
Clearly it is worthwhile to do---even people with lower credit scores may benefit---because refinancing at a lower rate that is not even the LOWEST available rate, still frees up funds for other uses.
Your best place to investigate refinancing is with your current lender because he has all your financial records and knows your payment record. If you've been golden with him, he is likely going to let you refinance at a lower rate than some new lender you might approach.
A recent LendingTree survey conducted online by Research Data Technology, Inc. from November 16 to November 27, 2012 found that some homeowners may have benefited as a result of the housing market crash, with saving about two percentage points off their mortgages by refinancing.
Nearly 60 percent of homeowners refinanced an existing mortgage, a third obtained a purchase mortgage, and 10 percent did both. Homeowners shaved on average two percentage points off their mortgages after refinancing, saving thousands of dollars over the mortgage term
Of those who refinanced in the past three years:
- 62% opted for a mortgage of the ‘same term’ as their original loan
- 27% refinanced into a ‘shorter term’ mortgage
- 11% refinanced into a’ longer term’ mortgage
Doug Lebda, chairman and CEO of LendingTree said, “The long-term benefits of shorter term mortgages are substantial, but you need to identify your financial priorities. Depending on your current rate, you may be able to reduce your mortgage term, build more equity and pay off your mortgage in half the time with very little impact to your monthly mortgage payment.”
