7 minute read
ERA Martin/Shamrock Division
NEW YORK – Despite record low interest rates, just 19 percent of homeowners with a mortgage that they had prior to the pandemic have refinanced since the start of the outbreak, according to a new Bankrate.com report.
Furthermore, 38 percent of homeowners with a mortgage do not know their current interest rate, making it impossible for them to know if they could benefit from refinancing.
Meanwhile, almost half (47 percent) with pre-pandemic mortgages haven’t even considered refinancing, and more than a quarter (27 percent) have considered refinancing but haven’t done it. Curiously, 7 percent don’t know if they’d refinanced or not.
Of those who haven’t refinanced, 32 percent believe it wouldn’t save them enough money, 27 percent point to high closing costs/fees, 23 percent think there is too much paperwork/hassle, 14 percent plan to move or pay off the loan soon, 12 percent cite credit score issues, 9 percent wouldn’t qualify due to unemployment or reduced income, and 4 percent owe more than their home is worth.
Twelve percent cite some other issue and 12 percent don’t know the reason.
“The overwhelming majority of mortgage borrowers have not yet refinanced, despite record low rates over the past year,” said Bankrate.com chief financial analyst Greg McBride, CFA.
“Cutting the monthly mortgage payment by $150 or $250, possibly more, can create valuable breathing room in the household budget at a time when so many other costs are on the rise.
For example, a 30-year loan for $300,000 at 4 percent would cost $1,432 per month. Refinancing to 3 percent would cut it to $1,265, reducing the payments by $167 per month or $2,004 per year.
A key to determining if refinancing could offer a money-saving opportunity, 38 percent of homeowners with a mortgage do not know their interest rate, including 54 percent of millennials (ages 25-40).
Of those that do, the median rate being paid is 3.57 percent and the average is 4.57 percent, both well above current levels that can be refinanced for significant savings.
Forty-six percent of total borrowers have a rate of 3 percent or more, making them likely candidates to refinance at lower rates.
As for what mortgage holders view as good reasons to tap into their home equity via a cash out refinance, home improvements or repairs (60 percent) and debt consolidation (44 percent) are the runaway leaders.
Other reasons cited less often include keeping up with regular household bills (19 percent), paying tuition or other education expenses (19 percent), other investments (16 percent), and vacations and/or big ticket nonessential items like electronics or a boat (10 percent).
Troublingly, 21 percent of millennial borrowers think vacations and/or big ticket non-essential items represent good reasons to tap into home equity In addition, millennials have a higher likelihood of viewing home equity as a way to keep up with household bills (28 percent, compared to 17 percent of Gen X, ages 41-56, and 14 percent of baby boomers, ages 57-75) or to make other investments (26 percent, compared to 17 percent of Gen X and 10 percent of baby boomers).
It isn’t all bad for millennials, however, as 28 percent with pre-pandemic mortgages refinanced during the coronavirus outbreak.
Those with incomes of $50,000 or more are also nearly twice as likely to have refinanced (24 percent) compared to those with household incomes below $50,000 (13 percent).
Racking up wealth with home equity
SAN FRANCISCO — With U.S. home prices surging at the fastest pace in four decades, homeowners are sitting on a record $22.7 trillion of home equity, $2.7 trillion of that gained in the last year alone, according to a new study by Unison, the leader in home co-investments.
“We’re seeing an unprecedented bifurcation of the market,” Thomas Sponholtz, CEO and chairman of Unison said. “With incredibly strong demand for homes and housing supply significantly below the historical average, many buyers are paying a premium above the listing price - if they’re able to find homes at all.
Meanwhile, homeowners are participating in one of the biggest wealth-building moments we’ve seen in residential real estate.
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The River House Inn, a Bed & Breakfast on the Pocomoke River in historic downtown Snow Hill. Nationally registered with historical Victorian home w/charm & history offering 2+ acres w/panoramic views of the Pocomoke River. Main house boasts 5 BRs & 5.5 baths in 6,000+ sq. ft. of living space, Pub Room, Dining Room that can be separated into 2 separate eating areas, Large Gourmet Kitchen & Social Room for guests. Innkeepers quarters include private bedroom, full bath, living room, office & outside deck overlooking pool area. 3 private cottages on the property offering 7 additional rooms for guests. In-ground pool. Well sought-after location is a popular wedding venue w/accommodations for the entire wedding party or weekend getaway. Nature lovers home away from home with just a short drive to Ocean City & Assateague National Seashore. Bulk-head and deep-water boat dock. Benefits of this property are too lengthy to list. You MUST see it for yourself! MLS MDWO121678 35 HARBORVIEW DRIVE • OCEAN PINES • $999,000
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NEW PRICE 33925 S.
WEST STREET PITTSVILLE $179,900
This 10.91 acres is the perfect place to build your dream home! Situated close to the beach and airport you can have the best of both worlds. Live the country life like the locals but be close enough to spend your days on Assateague Island or Ocean City.
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59 SEAFARER LANE
OCEAN PINES • $284,900 Updated and recently painted 4BR/2.5BA. Spacious kitchen w/updated countertops & open living room. Primary BR w/en suite bathroom. Newer washer/dryer & water heater. Finished bonus room w/2 access doors, 1 lead to front porch & other up to back of house. 2 bed/1 bath in-law suite w/own eat-in kitchen, living room, washer/dryer & deck. MLS MDWO122498 BEAVER POND ESTATES
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5930 BOX IRON ROAD GIRDLETREE • $74,900
Located close to boat ramps & Chincoteague Island. This 4BR/3BA is a great handyman special on 1.0 acre lot! Some repairs have been done to home but still in need of some TLC.
MLS MDWO2000080 NEW PRICE
11305 MARINA DRIVE BERLIN • $399,000
Direct riverfront 2BR/2.5BA townhome on protected cove on St Martin River w/community dock, pavilion. Boat slips are available for rent & off-season community boat storage. Completely furnished & includes a canoe! 3 renovated BAs; new HVAC, DuRock Exterior Finish System, oversized garage w/large elevated storage space. MLS MDWO2000122
NOT READY TO SELL? WE’RE SEEKING LONG & SHORT TERM RENTAL HOMES Let Us Manage Your Property – We Have a List of Qualified Tenant Applicants Just Waiting for Your Home
