Refinancing a home mortgage has never been easier, yet 74% of homeowners have not refinanced since the coronavirus epidemic began.
Mortgage refinancing rates have been historically low since the beginning of the epidemic. Refinancing a mortgage is a sure way to reduce homeowners monthly payments and ultimately save more money. So why are so many choosing not to refinance?
“Despite the fact that prices are once again hovering around all-time historical lows, many people are suffering from complacency due to low rates in the last few years. This is unfortunate because many will miss one last chance to refinance and save money, as interest rates can be very high, ”said Jason Utten of First Rate Financial.
According to a recent survey, the three main reasons people cite for not refinancing are (1) they will not save enough money, (2) the cost of closing is too high and (3) too much paperwork.
Here are three ways to overcome these dilemmas:
1. Save money in the long run: To be sure, many homeowners have already refinanced and are not interested in doing so again Call it “refinance fatigue”. Also, some believe that refinancing will not be worth the expense: 32% are not looking to add math.
But earlier this year, a survey found that at a 30-year fixed rate of 2.88%, about 17 million homeowners could save a total of more than $ 5 billion – homeowners just over $ 300 per month.
Pat Fox, a senior loan consultant at Caliber Home Loan, says: “Most people don’t understand math. They just look at the rate. They do not realize the real power of interest savings over time. When I talk to a client, I not only help them understand what their monthly savings and break-points will be, but I show them their growing interest savings, where there are actual savings. ”
2. Recover closing costs: One in four homeowners believe that closing costs are too expensive Although considering these costs, it is also important to do math tests. When you lower your rates, you’ll save money every month, so you’ll eventually recover the cost of closing – and be in a better financial position in the long run.
You can shop for the best possible terms and costs to make it work. There are always competing offers from different lenders, so it is important to be aware of how those offers stack up against each other. For example, some lenders may offer lower rates but charge higher fees.
3. Look for a better customer experience: If you’ve ever applied for a mortgage, or even seen a new mortgage product online, you’ve probably noticed that there are a number of steps involved. Whether it’s choosing your lender from a list or determining how much you owe, there’s a lot to take.
It is important to find a firm that has a streamlined and easy customer experience. Look at things like digital verification of bank statements, so that the paperwork process can be smoother. Also try to find a provider that provides customer service over the phone and on its website, so there are multiple ways to connect. Like any other industry, good mortgage lenders treat their customers with respect and dignity. They value you and are with you at every step of the refinancing process.
Sanjeev Das is the CEO of Caliber Home Loan.
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