in our free newsletter.

Thousands benefit from our email every week.

  • Discounts and special offers
  • Subscriber-only articles and interviews
  • Breaking news and trending topics

Already a subscriber?

By signing up, you accept Moneywise's Terms of Use, Subscription Agreement, and Privacy Policy.

Not interested ?

Monthly savings in the hundreds still possible

Mortgage home
comzeal images / Shutterstock

So what gives? Well, rising interest rates have been scaring off potential refi candidates who believe the window may have closed for getting a lower rate on their mortgage.

But homeowners shouldn't make that assumption, says the mortgage technology and data provider Black Knight. It estimates 11.1 million U.S. mortgage holders are still in a good position to refinance — and together are leaving $3 billion in potential refi savings on the table.

Those refinance candidates each could save some $277 per month by refinancing — and that's just the average. More than 2 million homeowners could save at least $400 per month and 1.2 million could save an average of $745 monthly.

You're in the refi zone if you're a 30-year mortgage holder with at least 20% equity in your home, your credit score is 720 or higher, and you could shave at least three-quarters of a percentage point (0.75) off your current rate by refinancing, Black Knight says.

But as mortgage rates have risen — while remaining near historic lows — the pool of refi candidates is shrinking and is the smallest it has been in a year. Last fall, 18.5 million mortgage holders were in a good position to save money by refinancing.

Stop overpaying for home insurance

Home insurance is an essential expense – one that can often be pricey. You can lower your monthly recurring expenses by finding a more economical alternative for home insurance.

SmartFinancial can help you do just that. SmartFinancial’s online marketplace of vetted home insurance providers allows you to quickly shop around for rates from the country’s top insurance companies, and ensure you’re paying the lowest price possible for your home insurance.

Explore better rates

Refi, other mortgage applications dip

Nicely trimmed and manicured garden in front of a luxury house on a sunny summer day. Street of houses in the suburbs of Canada.
rawmn / Shutterstock

Applications for refi loans sank 3% last week as overall requests for home loans dropped 2.2%, the Mortgage Bankers Association, or MBA, reported on Wednesday. It was the fourth week in a row that demand for mortgages, particularly refi loans, decreased.

Refinance applications were down 32% from the same time last year, and refinances shrank to 60.6% of all mortgage activity, from 60.9% the previous week.

Despite a slight dip last week, mortgage rates — still lower than they were a year ago — also are spooking would-be buyers. The number of applications to purchase homes was down 2% last week, though 39% higher than a year ago, at the start of the pandemic-fueled shutdown of the economy.

Home shoppers are feeling the pinch of rising mortgage rates, higher home prices and a record-low shortage of homes for sale, which is pushing home prices above the 10% growth rates seen way back in 2005, says Joel Kan, the MBA’s lead forecaster, in a news release.

“The housing market is in desperate need of more inventory to cool price growth and preserve affordability,” he says.

How you can still find a low(er) rate

Happy family is standing near their modern house, smiling and looking at camera.
4 PM production / Shutterstock

The MBA’s weekly survey shows the average for a 30-year fixed-rate mortgage did fall to 3.33% last week, from 3.36% the previous week. Rates have generally been on the upswing, though they remain much lower than they were 20, 10 and even two years ago, when the mortgage bankers' average for a 30-year loan was 4.45%.

So, if you're sitting on a mortgage from March 2019 and you haven't yet refinanced, you could be among the 11.1 million who still have a strong incentive to take out a new home loan.

Whether you're a homeowner considering a refi or an apartment dweller searching for your first home, start shopping around for an attractive mortgage rate — in case rates go higher still. Comparison shop by checking rates from multiple lenders to find the best deal available in your area.

Multiple studies have found that borrowers who compare at least five rate offers save thousands of dollars over time, compared to those who snap up the first loan they see.

If you’re not sure whether your credit history would make the cut with lenders, today it's very easy to check your credit score for free.

And though last year's rock-bottom rates may be history, you've got plenty of other ways to save on homeownership costs. When you buy or renew your homeowners insurance, review rates from multiple insurance companies to find the coverage you need at the lowest possible price.

Sponsored

Follow These Steps if you Want to Retire Early

Secure your financial future with a tailored plan to maximize investments, navigate taxes, and retire comfortably.

Zoe Financial is an online platform that can match you with a network of vetted fiduciary advisors who are evaluated based on their credentials, education, experience, and pricing. The best part? - there is no fee to find an advisor.

About the Author

Nancy Sarnoff

Nancy Sarnoff

Freelance Contributor

Nancy Sarnoff is a freelance contributor with Moneywise. Previously, she covered commercial and residential real estate for the Houston Chronicle where she also hosted Looped In, a podcast about the region’s growth, development and economy. Her work has been recognized by the National Association of Real Estate Editors and the Society of American Business Editors and Writers.

What to Read Next

It's a lengthy, complicated process, so just keep your eyes on the prize: your new home.

Disclaimer

The content provided on Moneywise is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter.