With mortgage rates still at record lows, many homeowners are in a position to save hundreds of dollars a month on their mortgage payments.
Black Knight, a mortgage technology and data provider, said this week that it believes a record number of homeowners – some 19.4 million in all - are now eligible to refinance their mortgages at a lower rate. Those people could save an average of $309 per month if they do so.
For the week ending Nov. 25, the 30-year fixed-rate mortgage averaged 2.72%, an all-time low that means interest payments due on mortgages are lower than they’ve ever been.
Black Knight said the 19.4 million homeowners it believes are eligible for refinance are mostly “high-quality” candidates, meaning they have an existing 30-year loan and hold at least 20% equity in their homes, with a credit score of 720 or more.
Of those, more than 4.5 million borrowers could shave at least $400 a month off their existing mortgage bill, and 2.7 million could save more than $500 per month at today’s low rates, Black Knight said.
Some states have more homeowners eligible to save. For example, California has more than 3 million property owners who could save an average of $420 per month by refinancing, followed by Florida at 1.4 million, Texas at 1.3 million, and New York at 1.1 million.
“With 30-year rates still sitting at historic lows, refinance volumes are expected to remain strong in the coming weeks, particularly given the record high number of eligible candidates,” said Andy Walden, Black Knight economist and director of market research. “The third quarter saw an all-time high for refinance originations.”
Through the third quarter of this year, about 4.6 million borrowers have already refinanced, according to the Mortgage Bankers Association.