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Who can still benefit from a refinance?

Over the past several years, millions of Americans have been able to get into the mortgage market and take advantage of some of the lowest rates ever observed. This is true of both buyers and refinancers, but it has likely been the latter in particular that collectively benefited the most from rates bottoming out in the mid-3 percent range. But even now, there are likely still a large number of homeowners who could benefit from such a move.

Refinances have, in fact, dominated the mortgage market for years, more or less since the recession began. That is due, in large part, to the fact that lenders significantly tightened restrictions on purchase mortgages in particular, simply making it harder for people to get into the market as buyers. Meanwhile, low rates gave millions of current owners significant incentive to at least look into a refinance, and many took lenders up on the opportunity, potentially cutting their mortgage rates in half and saving huge amounts over the remainders of their home loans as a result.

Why is that the case?
The average mortgage rate available in the year or two before the recession actually hit was typically in the neighborhood of 5.5 percent or 6 percent, and even that number was, at the time, historically affordable. At the turn of the century, rates tended to bounce around in the 7 percent to 8 percent range. But with the economic downturn, and even for years after, rates started tumbling. Around the middle of 2012, they actually bottomed out, dropping into the mid-3 percent range.

Given how many people have locked in mortgage rates of as high as 8 percent in the previous decade-plus, that gave owners ample opportunity to save, and that trend has continued ever since. Rates haven't crept above 4 percent very often since 2012, and some experts now project economic difficulties abroad could lead to them hitting new lows at some point in the next few months. Some predict they could drop below 3 percent, which would have been an unthinkably low number even a decade ago.

Who's been left out?
Meanwhile, there has also been plenty of data to suggest that there are still homeowners who haven't taken the step to refinance in this beneficial rate environment. One of the biggest reasons for this is likely that many Americans simply cannot afford to save up enough money for the initial steps of refinancing, even with the knowledge that getting to that point would pay off for them in the long run.

But as rates continue to hover at low levels, or potentially even drop, it's possible that more of these financially troubled homeowners may be able to gain some traction in this regard, and get themselves to the point that a refinance becomes a realistic option. That, in turn, could help them to save thousands of dollars on mortgage rates that may be as much as double current affordability levels.

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