home owners Archives - Suburban Finance

Mortgage Rates Are At a Low

Current mortgage rates certainly aren’t the lowest that they have ever been. However, they’re definitely low. CNBC reports that the average 30-year fixed mortgage rate is now 3.73%. That’s lower than anytime in the past three years. With mortgage rates fluctuating dramatically even in the years before that, there’s a good chance that your own home mortgage is priced at a higher rate.

Haven’t Refinanced Your Home? You Might Be Losing $3200 Per Year.

The report indicates that on average, if you refinance your home to these low mortgage rates, you could save $266 per month. That adds up to nearly $3200 per year. Sure, you could do nothing and keep paying that interest to your mortgage loan. But why?

You could take that money and enjoy it. Better yet, you could take that money and make it work for you. Keep paying the same amount to your mortgage each month, but allow that extra money to go towards the principal. After all, you’re used to spending that money each month. If you refinance your home, then you owe less in interest. Paying the same amount you’ve been paying means that you’ll pay off your mortgage that much more quickly.

You’re Not Alone if You Haven’t Refinanced Your Home

According to that report, there are more than 8 million homeowners who haven’t refinanced to take advantage of these great rates. So, if you haven’t refinanced your home mortgage, then you’re certainly not alone. But just because millions of other people are wasting their money doesn’t mean that you should, too. Savvy home owners check regularly to see if refinancing your home makes financial sense. It’s something you should do periodically to make the most of your money.

In particularly, if you have an adjustable rate mortgage and you have not refinanced your home then you’re probably making a mistake. The security of a low fixed rate mortgage simply can’t be underestimated.

But I Just Got My Mortgage Last Year!

Many new homeowners mistakenly think that they have to wait for years before refinancing their home mortgage. That’s not the case at all. Sure, when rates are steady, there’s no reason to refinance. However, when rates change as much as they have lately, it’s worth it refinance whenever the rates are lowest.

If you just got your mortgage in the past year or two then you may not have even thought about refinancing yet. However, if you haven’t refinanced your home while the rates are lowest, then you might miss your best chance.

The report indicates that more than one third of borrowers who just got their home mortgage last year could benefit from refinancing now. That adds up to approximately 1.5 million people who could save money if they refinance their home. Are you one of those borrowers?

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Kathyrn Vercillo

Kathryn Vercillo is a professional writer with more than a decade of experience writing about healthy living and personal finance. She lives in San Francisco, where she has learned to maximize frugal living tips in order to thrive as a freelancer in one of the nation’s most expensive cities. When she’s not writing, she’s exploring the city on foot with her rescue dog. Learn more about her at www.kathrynvercillo.com.
Kathryn also writes about saving money with coupons over at GroceryCouponGuide.com

There are a lot of reasons why you might have homebuyer regrets. Although owning a home is one of the hallmarks of success for the middle class, it’s not without its problems. Millennials, in particular, have discovered that their financial situation is shaky. As a result, more than half of millennial home owners have homebuyer regrets. Here are five key reasons:

1. The Great Recession

Research indicates that millennials are considerably more likely to have homebuyer regrets than their Baby Boomer counterparts. The younger Gen Z has plans to buy homes young. So what’s going on with millennials? The great recession is likely a huge part of the problem.

This generation was already working, but not very far along in their careers, when The Great Recession struck. As a result, they were financially hit hard. If they’d already bought a home, they likely have found themselves struggling to make mortgage payments. The rest of their financial lives has just been too precarious.

2. They Didn’t Pay Enough Down

More than two thirds of millennials paid less than 20% for the down payment on their homes. This means two things:

They still owe a lot of money on their home mortgages.
Their mortgage payments are higher than if they’d paid more down.

Both of these things have led to some big homebuyer regrets.

3. They Didn’t Plan for So Many Ongoing Home Costs

Buying a home is just the first step of the home ownership process. You also have to keep your home maintained, which costs money. You might need renovations. Additionally, you may have to use your homeowner’s insurance, which can lead to greater rates there over time. Many millennials seem to have failed to plan for these costs.

“Millennials are planning 49% more renovations than Baby Boomers over the next five years, but they’re also three times as likely to use a personal loan and twice as likely to use a credit card to finance their renovations than Baby Boomers.”

Almost half of them were surprised at the cost of maintaining their homes. And they were four times as likely as Baby Boomers to use their homeowner’s insurance in the past year. So, they are spending more money on maintaining and renovating their homes. Yet they don’t actually have that money, which means that they’re paying high interest rates on loans to cover those costs. It’s overwhelming.

4. Overall, Their Mortgages Are Too High

More than anything else, millennial homeowners resent how much money they pay towards their mortgages. Maybe they aren’t earning enough as they still try to recover from The Great Recession. Perhaps they have too many other costs in their lives, including children and exorbitant student loans. Maybe the choices they’ve made with down payments, mortgage companies, and refinancing have left them struggling financially. Whatever the reason, the number one cause of homebuyer regrets among millennials is the high cost of their mortgage.

5. They’re Still New to Home Ownership

More than 60% of millennials have only owned their homes for five years or less. Those first years are hard. You’re adjusting to paying a mortgage. You’re learning all that it takes to pay for and maintain a home. You may not be used to the higher energy bills and property taxes as compared to when you were renting. Perhaps, as time goes on, these same millennials will have fewer homebuyer regrets because they’ll have adjusted to what it means to own their homes.