74% Of Homeowners Haven t Refinanced Despite Record Low Mortgage Rates Survey
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are the second most-frequently cited objection. Fully 27 percent of respondents named that as an obstacle. It’s true — closing costs can cost you thousands of dollars, typically 3 to 5 percent of the amount of the loan. However, if you can cut your rate significantly, you’ll recoup those closing costs. Another common objection is that refinancing requires too much paperwork, a hurdle cited by 23 percent of those who have yet to refinance. “Isn’t saving $30,000 over the next decade worth devoting a few hours of your time?” McBride asks. Some 14 percent of those who haven’t refinanced said they plan to move or pay off the loan soon. That’s a valid reason not to refinance because it can take years to pay off closing costs, so refinancing is best for homeowners who plan to keep their new mortgages for years. And 12 percent said their credit scores were too low to refinance. That could be another credible reason not to refinance — . On-time mortgage payments are one of the best ways to , so make sure you’re paying your loan promptly. Whatever your reason for not refinancing, you should take a closer look, McBride says. “The most-cited reasons for not refinancing might not hold up in this environment of ultra-low rates,” he says. If you’re concerned about dipping into cash to pay closing costs, consider rolling those costs into the balance of the loan (known as a ), McBride says.
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Bankrate commissioned YouGov Plc to conduct the survey, which consisted of a total sample size of 3,657 adults, including 1,041 with a mortgage. Fieldwork was undertaken from July 26-29, 2021.The most common reasons homeowners say they haven t refinanced
Among homeowners who haven’t refinanced, the most-cited reason was that they wouldn’t save enough money to warrant a refi. That choice was named by 32 percent of respondents. “You may want to rethink that,” McBride says. “Today’s rates are at levels unseen prior to last year.” To illustrate one example, if you have a 30-year loan for $300,000 at 4 percent, your monthly payment is $1,432. Refinancing to 3 percent would cut it to $1,265, a savings of $167 a month or $2,004 a year. You can use Bankrate’s to see if refinancing will save you money.are the second most-frequently cited objection. Fully 27 percent of respondents named that as an obstacle. It’s true — closing costs can cost you thousands of dollars, typically 3 to 5 percent of the amount of the loan. However, if you can cut your rate significantly, you’ll recoup those closing costs. Another common objection is that refinancing requires too much paperwork, a hurdle cited by 23 percent of those who have yet to refinance. “Isn’t saving $30,000 over the next decade worth devoting a few hours of your time?” McBride asks. Some 14 percent of those who haven’t refinanced said they plan to move or pay off the loan soon. That’s a valid reason not to refinance because it can take years to pay off closing costs, so refinancing is best for homeowners who plan to keep their new mortgages for years. And 12 percent said their credit scores were too low to refinance. That could be another credible reason not to refinance — . On-time mortgage payments are one of the best ways to , so make sure you’re paying your loan promptly. Whatever your reason for not refinancing, you should take a closer look, McBride says. “The most-cited reasons for not refinancing might not hold up in this environment of ultra-low rates,” he says. If you’re concerned about dipping into cash to pay closing costs, consider rolling those costs into the balance of the loan (known as a ), McBride says.