Why aren’t more people refinancing home loans?

Nathaneal Soto and Jogenia Gonzalez wanted to take advantage of the super low mortgage rates, so they refinanced their loan for huge savings.

“Before, I was paying 4.7%. Now, it dropped to 2.8%,” Soto said. “We are saving about $400.”

With mortgage rates still near historic lows and the potential for big monthly savings, why don’t more homeowners do it?

“Despite the prospect of saving thousands of dollars off their loan, many homeowners are not refinancing their loans to take advantage of these historically low interest rates,” said Consumer Reports’ Octavio Blanco. “We know that’s especially true for minority homeowners.”

A recent study found that 6% of all re-fi applications came from Black borrowers. Nine percent came from Latinos.

Refinancing often takes time and money. Banks need all of the same information you provided when you first were approved. That means gathering proof of employment, tax returns, credit checks and other financial documents. It can feel overwhelming and not worth it.

Added to that, the pandemic, which hit Black and Latino communities harder than other groups, may also have hindered refinancing efforts.

There is help available to bridge the gap. A HUD-approved housing counseling agency can help answer questions and get borrowers started.

“They can help you get your documents in order, explain what refi options are best suited for you, assist you in calculating the costs and how long it will take to pay those back,” Blanco said.

Click here for a link to those agencies.

In San Antonio:

City of San Antonio Department of Neighborhood and Housing Services: 210-207-5309Greenpath Financial Wellness: 888-860-4167Money Management International: 866-232-9080Neighborhood Assistance Corporation of America: 210-826-2828Neighborhood Housing Services of San Antonio: 210-533-6673Our Casas: 210-354-2400

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