(WXYZ) – Nathanael Soto and Jogenia Gonzlez wanted to take advantage of lower mortgage rates, so they recently refinanced for big monthly savings.
“I used to pay 4.7%, now it’s down to 2.8%, we’re saving around $ 400,” the couple said.
So why aren’t more homeowners doing what they did?
“Despite the prospect of saving thousands of dollars on their loan, many homeowners do not refinance their loans to take advantage of these historically low interest rates,” said Octvio Blanco of the Consumers Report. “And we know this is especially true for minority owners.”
A recent study found that only 6% of all refi requests were from black borrowers, while only 9% were from Latinos.
Refinancing often takes time and money. Banks need the same information you provided when you first approved for a mortgage.
It may seem overwhelming to some and not worth it.
Add to that the COVID-19 pandemic which has hit black and Latino communities much harder than other groups – and you can begin to understand why communities of color are not refinancing at the same rate as their white neighbors.
But there are ways to close this gap.
Consumer reports indicate that working with a hud-approved housing counseling agency can help answer your questions and get you started.
“They can help you put your documents in order, explain which refi options are best for you, help you calculate the costs of a refi and how long it will take to pay them off,” Blanco said.
They might suggest shopping beyond your current lender and seeking refinancing from multiple banks. It could improve your chances of getting approved. You might even find a better rate.