Number of homeowners that could benefit from mortgage refinancing drops to 2 million, Black Knight says

The number of homeowners that could benefit from refinancing their mortgage is dropping, according to Black Knight, but millions could still save up to hundreds per month. (iStock)

Many homeowners are beginning to lose the incentive to refinance their mortgage amid rising rates, according to mortgage technology and data provider Black Knight, meaning they'd no longer be able to lower their monthly mortgage payment through a refinance.

The company added that mortgage rates saw their greatest two-week jump since 2009 over the past 14 days, rising to 4.42% for the average 30-year fixed-rate mortgage, according to Freddie Mac data. The rise also represents the highest the 30-year mortgage has been since January 2019.

Per Black Knight, this cut the population of those that could lower their monthly payment by refinancing down to just two million homeowners, an 80% drop since the beginning of the year and down 50% solely in the month of March.

If you're interested in finding out if refinancing your mortgage could help you save each month, consider visiting Credible to find your personalized interest rate and compare loan options. Doing so won't affect your credit score.

AVERAGE HOMEOWNER GAINED OVER $55K IN EQUITY IN 2021: CORELOGIC REPORT

$635 million in monthly savings still available through refinancing, Black Knight says

The last time that just two million homeowners had the ability to lower their monthly mortgage payment by refinancing was in the fall of 2018 (October and November), Black Knight says, when interest rates surpassed 4.8%. Currently, homeowners could save an aggregate total of $635 million per month.

This results in an average of $312 per borrower, according to the company. About 475,000 borrowers could save at least $400 per month, and fewer than 300,000 could save $500 or more on their monthly payment.

Black Knight defines refinance candidates as 30-year mortgage holders who have a maximum 80% loan-to-value (LTV) ratio and a credit score of 720 or higher who could share 0.75% off their mortgage by refinancing. However, there are various loan products available to homeowners that don’t meet this criteria. Omitting credit score and LTV criteria, just under four million borrowers could lower their mortgage payment, the company said.

If you are interested in refinancing your mortgage, consider visiting Credible to compare multiple mortgage lenders at once.

2021 SEES MOST CASH-OUT REFINANCES IN NEARLY TWO DECADES: BLACK KNIGHT DATA

How homeowners can save by refinancing their home loan

One of the easiest ways for homeowners to save money each month is by refinancing their mortgage. They could consider using an online marketplace such as Credible to compare rates from multiple different lenders without affecting their credit score.

Doing so allows them to compare their new rate to what they are currently paying, and see how much they can save with a lower interest rate.

Homeowners can also consider refinancing to withdraw cash from their homes as home prices rise, increasing the home equity available to them. A recent report from data company CoreLogic showed the average homeowner gained $55,000 in equity last year. Homeowners could potentially put these funds toward home improvement projects or to pay down high-interest debt. They can take a cash-out refinance on their current loan or use a home equity line of credit (HELOC) to take out a new loan using their home’s value.

If you're interested in tapping into your home's equity, you could consider cash-out refinancing. Contact Credible to speak to a home loan expert and get all of your questions answered.

Have a finance-related question, but don't know who to ask? Email The Credible Money Expert at moneyexpert@credible.com and your question might be answered by Credible in our Money Expert column.