According to personal finance website MyFinance, as many as 2 million homeowners may have refinanced their homes last year here in the United States. The financial value of these deals came in just shy of $749 billion. An estimated 6.7 million homeowners are eligible, yet haven’t taken the necessary steps to refinance their homes.
Most homeowners who have refinanced their homes in recent years have been motivated to do so because of the record low-interest rates that have been in place since not too long after the 2008 recession passed. While the federal government has threatened to raise rates, they’ve done little to put that plan into motion.
MyFinance argues that most consumers would save as much as $4,264 per year in interest by refinancing their homes right now while interest rates are low.
For some homeowners, refinancing their home may mean the difference between being able to afford to stay in their house or having to let it be foreclosed on.
Most homes that were purchased before the recession hit were appraised high and the mortgages that homeowners qualified for were offered at elevated interest rates. Many of those homeowners who purchased their homes or qualified for loans around that time may now be struggling to make monthly mortgage payments because they’re being assessed an unrealistic interest rate that’s affecting their monthly payment.
There are a number of programs that a homeowner may qualify for including the Home Affordable Refinance Program (HARP). If a homeowner qualifies for this, as 3.3 other Americans already have, then they may be able to negotiate a better interest rate on their home.
Even when a homeowner isn’t upside down on their mortgage, they may elect to refinance their home simply as a way to change the type of loan or its terms. For example, a homeowner with an adjustable rate mortgage may decide to take on a fixed rate one.
Qualifying to refinance your mortgage is not guaranteed. Whether a lender will allow you to do so can be contingent upon a variety of factors including your creditworthiness. One of the benefits of having an Augusta refinancing attorney representing you in your real estate property transaction is that they can let you know what your options are in your own unique situation.