Surprisingly, many paying the loan for housing residents of the United States don’t know what their mortgage rate, it says Fox Business. According to broker Steve Tsvetkova, this lack of knowledge can stand them thousands of dollars in unnecessary costs per year.
According to the February survey by Bankrate, about 27% (and more than a quarter) of homeowners in the US do not know the interest rate you pay on their current mortgage agreement.
Among young borrowers, the level of ignorance of higher — about 34% of homeowners in age from 29 to 39 years old do not know the interest rate on their mortgage. Among people aged 56 to 74 years, the figure is 23 percent.
“We are talking about the fact that more than a quarter of mortgage borrowers don’t know the interest rate they pay on the current mortgage, losing potential profits. Given the decline in mortgage interest rates that we have observed, many homeowners could save by refinancing their loans,” said mark Hamrick, senior economic analyst at Bankrate.
Ignorance of mortgage rates can be a costly mistake because even a small percentage in this indicator could eventually result in tens of thousands of dollars of overpayment. This is especially important for those who have adjustable mortgage rates that can rise and fall.
According to him, now the country has developed a very profitable situation for refinancing, which can help save millions of homeowners.
Photo from the personal archive of Steve Tsvetkova
Why now is the best time for mortgage refinancing
Because of coronavirus in the United States began an economic crisis. However, experts predict that it will not be long. Moreover, it has reduced the interest rates in the mortgage market, which is extremely beneficial for borrowers and provides ample opportunities to refinance and save.
Best position for refinancing in this situation is that you have a 30-year mortgage with a rate above 4%, most people in the US now feature these are the loans for housing.
Mortgage rates currently average of 3.33%, according to weekly data company Freddie Mac. A year ago this figure was equal to 4.08%. 3,33% — average, with some deals on refinancing at the end of March it was possible to close with a rate of 2.75%, which is significant savings on your monthly premiums.
How much you can save
According to a recent study LendingTree, the average loan refinancing helps the borrower to save about 163 dollars a month, or 1 953 dollars a year, compared with those who do not resort to revision of rates and refinancing.
The savings can be really stunning in housing markets with high prices. For example, borrowers in San Francisco, abandoning the refinance will pay for the house on average 66 000 dollars more in additional interest over the term of the mortgage.
California is the best state for mortgage refinancing, there savings will be tangible.
A screenshot of the site moneywise.com
Savings on reduction of monthly payments the money can be used more efficiently. For example, to postpone their retirement or to Fund your Fund in case of emergency.
What if the money to pay the loan at all
Many have lost income and work during a pandemic coronavirus, therefore, lenders and government agencies offer several options for relief created by the mortgage the financial burden on people.
Mortgage on pause (Mortgage forbearance)
Mortgage pause is when the lender allows the borrower to suspend or reduce mortgage payments for a limited period of time. But remember, the pause does not reduce your debt, and you have to compensate for any missed or reduced payments in the future. Therefore, resorting to this option is only in an extreme case, because otherwise you risk to accumulate more debt.
Depending on the type of credit you have, different options are possible pause of the loan to evaluate your specific options, you must consult with a broker.
A moratorium on evictions of borrowers and the sale of the property by the lender (Foreclosure)
Foreclosure (foreclosure) is the process when a lender takes a home because of the fact that the homeowner time does not make the necessary mortgage payments. The foreclosure process varies from state to state, and now many regions have imposed a temporary ban on such actions of creditors, to protect the victims of the crisis borrowers. Details for your particular region need to check with your broker.
But again, to use this moratorium is only in the most extreme case, because with the expiration of restrictions imposed by government agencies, the debt will not go away.
The material is prepared in partnership with
Broker Steve Flowers
Cell: 925-594-2520 Address: 51 E Campbell Ave. Suite 110, Campbell, CA 95008 Instagram Facebook