Refinancing in 2022: Why Many People Aren’t Refinancing – and Why They Should
Still, a lot of people are hesitant, especially minorities, so the folks at Consumer Reports have some advice.
Nathanael and Jogenia Gonzlez wanted to take advantage of the lower mortgage rates, so they recently refinanced for big monthly savings.
“I used to pay 4.1%, now it’s down to 2.8%. We’re saving about $ 400,” he said.
Many homeowners could benefit from similar savings, but remain hesitant.
“Despite the prospect of saving thousands of dollars on their loan, many homeowners do not refinance their loans to take advantage of these historically low interest rates. And we know this is especially true for minority homeowners,” he said. said Octavio Blanco, editor of Consumer Reports Money.
A recent study found that only six percent of all refi requests came from black borrowers, while only nine percent came from Latinos.
Refinancing can take time and money. Plus, banks need the same information you provided when you were first approved for a mortgage, including a consistent work history, tax returns, credit check, and more. financial documents.
It may seem overwhelming and not worth it.
Add to that the COVID-19 pandemic, which has hit black and Latino communities much harder than other groups, and you can begin to understand why communities of color are not refinancing at the same rate as their white neighbors.
But there are ways to close this gap.
Consumer Reports said working with an HUD-approved housing counseling agency can help answer your questions and get you started.
“They can help you put your documents in order, explain which refi options are best for you, help you calculate the costs of a refi and how long it will take to pay them off,” Blanco said.
They might suggest shopping beyond your current lender and seeking refinancing from multiple banks. It might improve your chances of getting approved and you might even find a better rate.
And when your refi is over, don’t forget to have a plan for your savings. CR suggests that you increase your emergency cash reserves, increase your pension contributions, or put money into a 529 plan for your children’s education.
Copyright © 2022 WPVI-TV. All rights reserved.