Bankrate.com study also has some revealing stats about moving plans
Millions of American homeowners are in the dark about their current mortgage rate according to a recent survey.
It found that 27% across all ages including around a quarter of Gen X and Baby Boomer borrowers don’t know the rate on their primary residence; while almost one third of Millennials are unsure, with 27% believing it is at least 5%.
The Bankrate.com survey reveals that just 1 in 3 respondents know that their mortgage rate is below 4%.
“Given the decline in mortgage rates we’ve seen over the past year, many qualified homeowners would stand to benefit, or save, by refinancing,” said Mark Hamrick, Senior Economic Analyst, Bankrate.com. “With the prospective reduction in monthly payments, the savings could be better put to use, including toward retirement or another worthy financial goal. Here’s where what you don’t know can hurt you, costing you money.”
No plans to move
The survey also shows that homeowners might need to become more familiar with current mortgage rates soon but not for a purchase.
Just 21% saying they expect to move in the next 5 years (32% of millennials) while almost two thirds are at least somewhat likely to remodel or renovate their current home in the next five years, with millennials being the most bullish (72%).
However, perhaps as thy think mortgage rates are higher than they are, almost half will finance their home renovations through savings, while 10% will use credit cards or a personal loan. Just 16% will use a refinance mortgage or HELOC.
“Given the average interest rate of 17% charged on credit cards, it is critically important that these balances are paid off immediately before the cost of the project goes up substantially due to added financing expense,” Hamrick said. “If there’s one inescapable fact about homeownership, it is that major repairs will eventually be required, meaning you’ll be on the hook for even more work down the road.”
