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If you have a mortgage, do yourself a favor and check out if it makes sense to refinance.

My contact at Black Knight pinged me this morning with these observations:

  • The Freddie Mac 30-year average is now 3.45%, the lowest level in almost 3.5 years and just 14 BPS above all-time lows.
  • This pushed the number of high-quality refinance candidates to approximately 11.3M, for an aggregate potential monthly savings of $3B – both the highest on record outside of a single week last September when rates also fell below 3.5% for a brief period.
  • About 1.1 million homeowners could save $500 per month or more through a refi into a new 30-year fixed loan.

December Mortgage Monitor

Here is the charts from the Black Knight December Mortgage Monitor.

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The bullet points above are more current than the chart.

As of December, those refinancing s could save $264 per month, for an aggregate monthly savings of nearly $2.5 billion. The aggregate savings is now $3 billion.

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Home Price Appreciation

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Black Knight comments that low mortgage rates makes home more affordable.

I disagree. Prices have dramatically outstripped wage growth as most looking to buy a home understand.

Refinance Smartly

If you refinance, do so smartly. This is what I suggest.

  • Don't take money out to spend it.
  • Don't extend the length of the loan. Just refinance what is left.
  • Do take this opportunity to deleverage.

If you have credit card debt, pay it off, perhaps with some cash back, but don't rack it up again.

Mike "Mish" Shedlock