As mortgage rates dip to record lows, many homeowners are in a position to save hundreds of dollars a month.
A record number of homeowners are eligible to refinance into a lower mortgage rate, saving an average of $309 per month, according to new research from Black Knight, a mortgage technology and data provider. About 19.4 million homeowners are good candidates to refinance, the report notes.
Freddie Mac reported that for the week ending Nov. 25 that the 30-year fixed-rate mortgage averaged 2.72%, remaining at all-time lows.
Black Knight considers the 19.4 million refinance-eligible homeowners to be “high-quality” candidates, which means they hold an existing 30-year loan with at least 20% equity in their homes and a credit score of 720 or higher.
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 notes.
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,” says 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.