Hawaii is the No. 1 state in the nation for potential savings through mortgage loan refinancing, according to a study recently released by NerdWallet. The report revealed that Hawaii homeowners could save $300 or more every month if they refinance. If you’re a Maui home owner with a mortgage, this might be of interest to you.
The homeowner habit seems to involve refinancing if the rate is one to two percent lower than the original, but based on the analysis of mortgage loan data, borrowers can save significantly even if the interest rate drops less than one percentage point. It doesn’t hurt to check with your lender to find whether you can get even a slight interest rate reduction through refinancing. As they say, waste not, want not.
The report highlighted the average interest rate in 2008, which was 6.03 percent for a 30-year fixed-rate mortgage. This rate fell to 3.35 percent in 2012. Based on data from BankRate.com, the national average is at 3.84 percent, while Hawaii’s is 3.54 percent. Depending on when you entered into your mortgage agreement, especially if it was before or in the early years of the recession, current interest rates could be lower than your current arrangement.
According to the study, around 5.2 million Americans are paying higher interest rates than they would be paying if they refinanced. Cumulatively, that adds up to $13 billion in savings for American homeowners.
Hawaii being at the top of the list for potential savings makes this a worthy topic of conversation. Interest rates are still low, but not likely to remain so for much longer. Being locked in to a lower fixed interest rate can lead to substantial cumulative savings over the years, especially if you’re in a 30-year mortgage.
Hopefully, this information will help lead Hawaii homeowners to better savings. As for you prospective Maui home owners, the state’s low average interest rates are likely a motivating factor for investing in real estate now rather than later. If you need assistance with that process, you’ll find our contact information at the bottom of the page. Mahalo!