Less than 1 in 5, or about 19 percent, of homeowners with pre-pandemic mortgages, have refinanced, according to a recent study from Bankrate. Close to half, about 47%, with pre-pandemic mortgages have yet to consider refinancing, while more than a quarter, about 27%, have considered, but have yet to actually refinance. In addition to this, 7% don’t know if they had refinanced their mortgage or not. "The overwhelming majority of mortgage borrowers have not yet refinanced, despite record low rates over the past year," said Bankrate.com chief financial analyst Greg McBride, CFA. The major reasons homeowners cited for why they haven’t refinanced included 32% believing it wouldn’t save them enough money, 27% saying there’s too many high closing fees and costs, and 23% saying there’s too much paperwork and hassle.
Despite this, "cutting the monthly mortgage payment by $150 or $250, possibly more, can create valuable breathing room in the household budget at a time when so many other costs are on the rise," McBride said. Other reasons also mentioned were plans to move or pay off the loan soon, credit score issues, not qualifying due to unemployment or reduced income, owing more than their home is worth, and lastly, not knowing the reason why they haven’t refinanced. "The most cited reasons for not refinancing might not hold up in this environment of ultra-low rates," McBride continued. "Reducing your payments with no out-of-pocket cash by rolling the costs into the loan are one way to trim the biggest household expense without compromising your savings account."
Source: Rise and Shred