In today’s challenging economic climate, homeowners across America are discovering that a quick mortgage review—taking as little as 7 minutes—could potentially lead to significant monthly savings. While the specific amount varies based on individual circumstances, many homeowners have reported savings that make a meaningful difference in their household budgets.
The Power of Mortgage Refinancing
According to the Federal Reserve Bank of New York’s 2023 Consumer Credit Panel, approximately 65% of American homeowners have not reviewed their mortgage terms in the past three years, despite significant fluctuations in interest rates.
“Many homeowners simply set up their mortgage and forget about it,” says David Stevens, former Commissioner of the Federal Housing Administration and former president of the Mortgage Bankers Association. “But the mortgage market is dynamic, and regularly reviewing your terms—even spending just a few minutes—can identify substantial savings opportunities.”
What Can Homeowners Actually Save?
While individual savings vary widely based on factors including loan amount, credit score, and local market conditions, the potential benefits are real:
- The Mortgage Bankers Association reports that the average homeowner who refinanced in 2023 reduced their mortgage payment by $175 per month.
- Freddie Mac’s research shows that borrowers who shopped around with multiple lenders saved an average of $1,500 over the life of their loan compared to those who only checked with one lender.
Dr. Susan Wachter, Professor of Real Estate and Finance at The Wharton School of the University of Pennsylvania, notes: “The mortgage market has become increasingly competitive, with lenders offering various incentives and rate reductions to attract qualified borrowers. Taking a short time to explore options can yield surprising results.”
The 7-Minute Mortgage Check
Financial advisors recommend these steps for a quick mortgage review:
- Know your numbers (2 minutes): Find your current interest rate and remaining loan balance.
- Check your credit score (1 minute): Use free resources like Credit Karma or your bank’s credit monitoring service.
- Review current market rates (2 minutes): Visit the Consumer Financial Protection Bureau’s rate comparison tool or Bankrate.com.
- Calculate potential savings (2 minutes): Use online calculators from reputable sources like Zillow or NerdWallet.
Mark Hamrick, Senior Economic Analyst at Bankrate.com, confirms the value of this approach: “The few minutes it takes to review your mortgage options often yields one of the highest returns on time investment a homeowner can make.”
Beyond Refinancing: Additional Strategies
Savvy homeowners are exploring multiple approaches to reduce housing costs:
- Mortgage recasting: Making a lump sum payment toward principal and having the lender recalculate payments based on the new balance.
- Removing private mortgage insurance (PMI): Once you’ve reached 20% equity, you may be eligible to eliminate this added cost.
- Appealing property tax assessments: The National Taxpayers Union Foundation estimates that 30-60% of properties are over-assessed, yet fewer than 5% of homeowners appeal.
The Bottom Line
While no single approach guarantees specific savings for every homeowner, mortgage experts unanimously agree that regular review of your home loan terms is financially prudent.
“The biggest mistake homeowners make is assuming nothing can be done about their mortgage,” says Greg McBride, Chief Financial Analyst at Bankrate. A small investment of time can identify opportunities that add up to significant savings over months and years.”
Financial advisors recommend checking mortgage options at least once a year or whenever there’s a half-percentage point change in prevailing rates. With online tools and resources widely available, the process is more accessible than ever before.
Disclaimer: Individual savings will vary based on numerous factors including credit score, loan amount, property value, and local market conditions. Homeowners should consult with financial professionals before making significant changes to their mortgage arrangements.
