19 million Americans can save money: mortgage refinancing has never been more profitable

A record 19,4 million homeowners in the US can now make significant savings from mortgage refinancing as rates hit new lows. The edition told in more detail CNBC.

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The average interest rate on the popular fixed 30-year mortgage has already set 13 declines this year. This happened again last week. This has given current homeowners an unprecedented opportunity to save on their monthly payments by refinancing their mortgages.

According to Black Knight, the latest 30-year mortgage rate record was 2,72%. This increased the number of mortgage refinancing candidates to 19,4 million, the highest ever.

Black Knight identifies candidates for refinancing among holders of a 30-year mortgage with at least 20% equity capital and a credit rating of 720 or more. If among these people there are those who, through refinancing, can reduce their current rate by at least 0,75%, they are included in the list of candidates.

These borrowers can save an average of $ 309 per month through refinancing, which translates into a combined $ 5,98 billion in potential monthly savings, also the largest ever. Although this is an average figure, some borrowers can save even more, given the current interest rates.

On the subject: Why is now the best time to refinance your mortgage

More than 4,5 million borrowers can save at least $ 400 per month, and 2,7 million can save over $ 500 per month by refinancing at these rates.

“With 30-year mortgage rates still at rock bottom, refinance volumes are expected to remain strong in the coming weeks, especially given the record high number of eligible applicants,” said Andy Walden, Black Knight economist and director of market research. “The third quarter of 2020 was a record quarter for refinancing, and consolidated interest rate data from Black Knight's Compass Analytics and Optimal Blue divisions indicate that volumes could continue at record levels into the fourth quarter.”

Refinancing a mortgage isn't exactly a pleasant experience given the complicated paperwork involved, but 4,6 million borrowers already did so in the third quarter of this year, according to the Mortgage Bankers Association.

The number of potential candidates for refinancing varies by state, population, and home value. In higher-cost states, borrowers pay off larger loans and are likely to be able to save more per month through refinancing.

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California leads the way with more than 3 million applicants who can save an average of $ 420 per month on a combined monthly savings of $ 1,3 billion, followed by Florida (1,4 million), Texas (1,3 million) and New York (1,1 million).

Throughout the city, the greatest savings are achieved in New York and its suburbs. About 1,4 million refinancing candidates could potentially save $ 606 million a month. Average monthly savings are $ 437 per homeowner. This is followed by the cities of Los Angeles (California), Chicago (Illinois) and Washington (DC), with 960, 000 and 723 candidates, respectively.

Home values ​​are skyrocketing due to high demand for housing due to the pandemic. According to the S&P Case Shiller National Home Price Index, prices rose 7% in September.

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