Are We Headed Into Another Refi Boom? How Millions Could Save with Rates Between 4.5% and 5.5%

With mortgage rates hitting their lowest levels since April 2023, now might be the perfect time for many homeowners to consider refinancing. Whether you’re looking to reduce your mortgage payments or consolidate high-interest debt, today’s rates offer an opportunity to achieve significant savings.

Current Rates from Our Lending Partners: A Golden Opportunity

If you’re a well-qualified borrower, you can take advantage of some great offers from our lending partners. Conventional loans are currently pricing at 5.5% (5.655% APR), FHA loans are available at 5.25% (5.768% APR), and VA loans are as low as 4.875% (5.212% APR). These rates are substantially lower than what Freddie Mac reported in their Primary Mortgage Market Survey? as of September 5, 2024. Freddie Mac showed the 30-year fixed mortgage rate at 6.35%, with a 4-week average of 6.41%, which is significantly higher than the rates currently available from our partners.

It’s important to note that Freddie Mac’s reports are based on older data and lag behind real-time rate movements. Mortgage rates are traded in real-time, so even though Freddie Mac’s report was published on September 5th, rates have since become much more favorable. Now is the time to act while these lower rates are available.

Why This Matters: U.S. Home Equity Is at Record Highs

The U.S. housing market has experienced an unprecedented rise in home equity, with homeowners holding over $30 trillion in tappable equity. This surge in equity provides a unique opportunity for homeowners to refinance not only to lower their mortgage rate but also to consolidate high-interest debt, such as credit card debt, personal loans, and Home Equity Lines of Credit (HELOCs), into a single, manageable monthly payment. With mortgage rates substantially lower than other forms of debt, this can be a smart financial move to lower overall monthly expenses.

How Many Could Benefit from Refinancing?

If rates drop to 5.5%, over 19 million homeowners could benefit from refinancing. Should rates drop further to 4.875%, approximately 23 million homeowners would qualify for significant savings. If rates go as low as 4.5%, an estimated 25-30 million homeowners could take advantage of refinancing opportunities, sparking a major refinance boom.

High-Interest Debt: How a Refinance Could Help

With credit card interest rates hovering over 20% and adjustable HELOC rates climbing higher, many homeowners are feeling the financial pressure of high monthly payments. Refinancing allows you to roll this high-interest debt into your mortgage at a much lower rate, significantly reducing your total monthly payments. Here’s an example:

Suppose you currently have a $300,000 mortgage at 4%, with 20 years remaining, and $50,000 in credit card debt at 20% interest. Your monthly mortgage payment would be $1,818, and your credit card debt payment would be approximately $1,100. In total, you’re paying $2,918 per month.

If you refinance your mortgage to consolidate the debt into a 5.5% mortgage for 30 years, your new loan balance would be $350,000, and your new monthly payment would be $1,987. This results in a reduction of your total monthly payments from $2,918 to $1,987, saving you $931 per month, despite the increase in your mortgage rate from 4% to 5.5%. The overall savings from consolidating high-interest debt into a lower-rate mortgage can provide financial relief and simplify your monthly payments.

What’s Your Magic Number?

Everyone has a rate that makes refinancing worthwhile for them. Whether you’re eyeing 5.5% or hoping for 4.5%, it’s essential to know your “magic number.” What rate would make refinancing make sense for you?

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Why Act Now?

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Mortgage rates often react in anticipation of changes, so the current dip could be your best opportunity to lock in favorable rates before they stabilize or rise again. Whether you’re looking to lower your monthly mortgage payment or consolidate debt, now is the time to explore your options.

Ready to Refinance?

If you’re unsure whether refinancing is right for you, or if you’re carrying high-interest debt and want to see how much you could save, I’m here to help. In 10 minutes or less, we can explore your options and find the best solution for your financial situation. Message me today to get started!

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Disclaimer: This is not a commitment to lend. Rates and terms mentioned are examples and subject to change. There are 20+ compensating factors—such as income, credit score, home type, loan type, county, zip code, income documentation, and reserves, to name a few—that influence individual eligibility and final loan pricing. Please contact us for specific rate details based on your unique situation.

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