Key Highlights
- According to Black Knight, “high quality” refinance candidates climbed to 19.4M last week
- Rates fell last week to 2.72%, lowest ever recorded in Freddie Mac’s 50 year history
Mortgage rates have stayed below 3% for 17 consecutive weeks. Last week, those rates fell to 2.72%, the lowest ever in Freddie Mac’s 50-year history.
These lowest-ever mortgage rates now open the door to an eye-popping 19.4M homeowners for refinance savings, according to Black Knight. Black Knight views ”prime candidates” for refinance savings as homeowners who are 30-year mortgage holders, have at least 20% home equity in their homes, have credit scores of 720 or higher, are current on their home mortgage payments and who can reduce their first lien rates at least -.75% by refinancing their current mortgage contracts.
In its latest report, Black Knight estimates that some 19.4M refinance candidates could save an average of $309/month via refinancing. If all those qualified borrowers opted to finance their mortgages, Black Knight estimates that the aggregate possible savings would hit $5.98B, the most refinance savings ever.
Black Knight also estimated that some 4.5M prime candidates could save at least $400/month and that some 2.7M borrowers could save an average of $500/month or more.
California has the highest number of prime candidates with some 3M potentially saving $420/month. Florida has some 1.4M prime candidates, Texas has some 1.3M and New York has approximately 1.1M.
Black Knight admits that its loan-to-value (LTV) and credit score assumptions are “conservative by design.” If Black Knight were to do away with its conservative eligibility requirements, potential refi candidates would soar some +65% to 32.1M mortgage holders
Where will mortgage rates be in 2021? The Mortgage Bankers Association is estimated that mortgage rates will come in at 3.3% by Q4 2021 as the economy begins to come back from the current pandemic nightmare.
Remember…as of December 1, borrowers wanting to seize record low rates to refinance will be paying the 50 bps adverse market refinance fee that begins on December 1.
Thanks to Black Knight, Mortgage Bankers Association, Freddie Mac and HousingWire.
Also read: Time to Watch Overall Delinquency Rates, Could Widening Crack in Mortgage Market Sink US Home Prices?, Could Widening Crack in Mortgage Market Sink US Home Prices?
