Black Knight Financial Services has released a report stating that over five million borrowers will be able to qualify and avail the benefits of mortgage refinance.
The company observed that mortgage rates have been relatively low last year, and but it is expected to rise this year, a report from CNBC said.
According to the report, the five million borrowers is less than the nearly seven million borrowers who have the capacity to avail mortgage refinance. The company said the average rate on the 30-year fixed mortgage is below 3.7 percent. However, it should be noted that the recent collapse of the stock market has caused the rates to fall back below 4 percent.
Based on the figures, the company said that there are 2.4 million borrowers who will be able to save more or less $200 in monthly mortgage payments. In addition, at least 1.9 million will be able to save $100 to $200 a month, should they avail the refinance.
In the same report, Ben Graboske, senior vice president at Black Knight Data & Analytics, explains the implications in the mortgage rates will be increased with 50 or 100 basis points.
"If rates go up 50 basis points from where they are now, 2.1 million borrowers will fall out of the running; a 100-basis-point increase would eliminate another million, leaving only 2 million potential refinance candidates, the lowest population of refinance candidates in recent history," Graboske said.
Graboske added that "while it's not a hard and fast rule that borrowers won't refinance into a higher rate in order to tap available equity - 23 percent of cash-out refi borrowers over the past six months did just that - for the most part, as rates rise, HELOCs will continue to become more popular to homeowners looking to tap available equity."
"Black Knight Financial Services is an American corporation that provides integrated technology, services, data and analytics solutions to the mortgage and real estate industries. Other products include ServiceLink, which focuses on transaction services for mortgage originators and on default services. On January 3, 2014, Fidelity National Financial acquired Lender Processing Services 'LPS,' renaming it Black Knight," Wikipedia said.
