Monday, November 03, 2014 1:19:26 PM
Author: Tory Barringer in Daily Dose, Data, Featured, News November 3, 2014 0
Recent declines in the average long-term fixed mortgage rate have opened up the pool of potential refinancers by nearly 25 percent, according to the latest Mortgage Monitor Report from Black Knight Financial Services.
Measuring its current data on active mortgages throughout the United States, analysts at Black Knight estimate 7.4 million American borrowers with 30-year mortgage loans could benefit by refinancing into a lower interest rate.
As of the end of October, the average 30-year fixed rate was 3.98 percent, according to Freddie Mac, just up from a 16-month low recorded earlier in the month. With the decreases observed over the last month, Black Knight says the number of refinance-eligible borrowers who could benefit from a lower rate has jumped by an additional 1.4 million.
"Before the most recent reductions in the average 30-year mortgage interest rate, approximately six million borrowers met broad-based 'refinancibility' criteria," said Trey Barnes, SVP of loan data products at Black Knight. "In light of where rates are today, and looking at borrowers with current notes at 4.5 percent and above, that population has now swelled to 7.4 million—almost a 25 percent increase."
Barnes added that the company's assessment is conservative, as those with current rates of 4.25–4.5 percent could "arguably benefit" from refinancing. The addition of that group brings another 1.7 million borrowers to the population, Barnes said.
On a related note, Black Knight also examined the state of home equity in the country, estimating that fewer than 8 percent of borrowers were underwater on their mortgage as of July, down from a level of 33 percent at the end of 2011, before the market experienced 28 straight months of home price appreciation
While an additional 8.5 percent of borrowers have less than 10 percent equity in their homes—putting them in a "near-negative equity" position, more than half of all mortgaged homes have 30 percent or more equity, "a level not seen in nearly eight years," Barnes said.
http://themreport.com/news/data/11-03-2014/refinancible-population-7-4m-interest-rates-fall
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