Friday, February 21, 2020 / by Vanessa Saunders
By Vanessa Saunders, MBA, MIMC , Broker Owner, Global Property Systems
Don't know your mortgage interest rate? You are not alone. A recent survey by Bankrate, a consumer financial services company, found that over one fourth of home owers don't know what their mortgage interest rate is. Why is that important? "Because if you don’t know your rate, you may be missing out on the opportunity to cut your monthly mortgage payment, the biggest item for most homeowners,” the study points out.
Bankrate also polled homeowners about how many more years they planned to stay in their current primary residence, whether or not they were planning to remodel and how they would pay for their home remodel. The vast majority of respondents, 56 percent, reported that they didn’t plan to ever move out of their home. Sixty-three percent of respondents said they were likely to remodel or renovate their home in the next five years.
About a third of respondents who own pay less than 3.99% interest or less. The average rate among respondents was 4.41 percent, 0.71 percent more than the current average rate for a 30-year fixed-rate mortgage.
Therefore, about 7 in 10 mortgage holders are either paying above the national average or don’t know what their mortgage interest rate is.
Mortgage rates have fallen considerably over the last twelve to twenty four months. If continuing global unrest frightens more investors out of stocks and into the security of bonds, interest rates will continue to drop. Homeowners who don't know what they're paying in interest on their mortgage will very likely miss the opportunity to re-finance when rates go down.
Some people think it's not worth the effort to save a half or a whole point in interest. But this neglect is going to cost more than they think. A $365,000 30 year mortgage at 4% will cost the home owner more than $37,000 over the course of the loan compared to the identical loan at 3.5%. That's $37,000 just flushed away with nothing to gain from it.
Global Property Systems says:
Over the long term, being aware of your mortgage could save you a significant amount of money, savings that might be better used for something you may be considering in the future. Maybe something like that renovation project, for instance.
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