Although interest rates are at all-time lows, many homeowners have not taken advantage of them and refinanced, according to an article by Kamran Rosen for Nerdwallet.
Since January, the number of those who are eligible to refinance has increased by about 30% thanks to decreasing interest rates, which dropped by 30 basis points. About 6.68 million homeowners across America could collectively save a total of $20 billion annually, Black Knight's latest Mortgage Monitor Report said.
“This expansion of potential candidates could very well provide a welcome and unexpected lift to the market as we move forward in 2016,” said Ben Graboske, Black Knight Financial senior vice president.
Black Knight defined candidates for refinance as those with a credit score of at least 720, with 20% home equity and a 30-year fixed mortgage rate at least 75 basis points, according to the article.
Meanwhile, states with a larger population tended to have higher refinance savings, the article in NerdWallet cited. Total savings were calculated by multiplying the potential refinance candidates in a state by the average potential savings.
Interestingly enough, some of the top states to save by refinancing are also some of the hottest real estate markets.
Here are the top 10 states to save money by refinancing:
10. Georgia
Georgia has an estimated 220,700 candidates eligible for refinancing, and the average individual savings is $230 per month. Statewide, monthly savings would be $50.7 million.
9. Pennsylvania
Pennsylvania has an estimated 225,900 candidates eligible for refinancing, and the average individual savings is $225 per month. Statewide, monthly savings would be $50.8 million.
8. New Jersey
New Jersey has an estimated 173,400 candidates eligible for refinancing, and the average individual savings is $312 per month. Statewide, monthly savings would be $54.1 million.
7. Illinois
Illinois has an estimated 231,800 candidates eligible for refinancing, and the average individual savings is $241 per month. Statewide, monthly savings would be $55.8 million.
6. Washington
Washington has an estimated 219,300 candidates eligible for refinancing, and the average individual savings is $264 per month. Statewide, monthly savings would be $57.8 million.
5. Virginia
Virginia has an estimated 213,000 candidates eligible for refinancing, and the average individual savings is $280 per month. Statewide, monthly savings would be $59.6 million.
4. Florida
Florida has an estimated 476,100 candidates for refinancing, and the average individual savings is $222 per month. Statewide, monthly savings would be $105.7 million.
3. Texas
Texas has an estimated 513,200 candidates for refinancing, and the average individual savings is $212 per month. Statewide, monthly savings would be $108.9 million.
2. New York
New York has an estimated 396,300 candidates eligible for refinancing, and the average individual savings is $341 per month. Statewide, monthly savings would be $135.3 million.
1. California
California has an estimated 912,500 candidates for refinancing, and the average individual savings is $328 per month. Statewide, monthly savings would be $299.4 million.
