Mortgage refinances have been on the rise given the drop in interest rates driven by market volatility regarding the coronavirus. Though, some homeowners are being cautious before they decide to take the plunge into refinancing their home.
"People see rates are low or rates are dropping, so we get a lot of calls. People just want us to run the numbers and make sure it makes sense," said Elysia Stobbe, a mortgage industry professional and author of How to Get Approved for the Best Mortgage Without Sticking a Fork in Your Eye, according to NPR.
"Stobbe says that on a $300,000 30-year fixed-rate loan, if you were at 4.5% and refinanced at 3.5%, that would save you about $2,000 a year in mortgage payments," the report says.
Stobbe cautions homeowners to think about the fees involved. They can vary from state to state and a homeowner only starts saving on their mortgage payments after those fees have been paid.
"And there's one last very important thing to consider, especially if you've been paying your mortgage for a long time, say five or 10 years. When you get a new 30-year loan, you go back to year one on your payments," according to the report.
To learn more about how to steer your clients in the right direction for refinancing their mortgages, click here.