Borrowers Lose by not Refinancing

DailyFinance tells MHProNews Credit Sesame says last year 35 percent of the 50 million U.S. mortgages qualified for refinancing but only 4.5 million borrowers did. Why? One reason, according to Kelli Dudley of DePaul University in Chicago, is “The mortgage foreclosure fiasco has had a major mental health cost for consumers. It is difficult to make economically rational decisions when the underpinnings of home ownership have been shaken. In short, consumers no longer trust lenders and see them as the enemy.” Another reason, according to Irene Shubldaze of Credit Sesame, noting how busy people are, is the time required to shop for deals, gathering and submitting the necessary documentation, consider interest rates, and weigh all this information against how long you expect to stay in the house. In addition, a lot of people think they can play the market and make more than by refinancing their mortgage and saving $5,000. Pete D’Arruda of Capital Financial Advisory Group says, “Everyone wants to brag and find that next Apple. I’m amazed at how much risk people are taking. They’re climbing the equivalent of a 30-foot ladder with no one holding it.”

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