A Cost-Saving Move for 7.1M Owners
April 7, 2015
An estimated 7.1 million home owners could benefit from refinancing their mortgage and reduce their monthly mortgage payments, finds a new report released by Black Knight Financial Services.
Read more: Refinancing Paid Off for Borrowers in 2014
"Black Knight looked at the population of borrowers whose current interest rates – as well as credit scores and loan-to-value ratios – mark them as good candidates for refinancing," says Trey Barnes, Black Knight’s senior vice president of Loan Data Products.
By the end of February 2015, there were about 7.1 million potential refinance candidates. As a comparison, in February 2014, about 4.1 million borrowers were found to be able to benefit from refinancing their mortgage, according to Black Knight Financial Services’ research.
"Through a combination of declining interest rates and increased equity among borrowers driven by home price increases, an additional three million borrowers now meet the same broad-based eligibility criteria as compared to one year prior," Barnes says. "Of course, this population is rate-sensitive; in fact, it was largely the decline of 60 basis points in the prevailing 30-year interest rate that resulted in the year-over-year increase in potential refinance candidates.
Likewise, if interest rates were to rise by just half a percentage point, three million borrowers would fall right back out of the running as far as benefiting from refinancing their mortgages."
Researchers also found that lower credit score borrowers – those with credit scores below 620 – are refinancing at the lowest level on record. "As a result, the average loan age for this group is 98 months, as compared to just 38 months and less for borrowers with credit scores of 750 and above," the report notes.
Source: Black Knight Financial Services
Updated: July 13, 2018