From CNBC 2/11/15
Ask any American how much money they make for a living, and they’ll tell you down to the weekly penny. Ask what interest rate governs their single-largest monthly expense, and more than a third don’t know.
“Your mortgage rate is one of the most important numbers in your financial life, and there’s a good chance that one of your neighbors has no idea regarding how much he or she is paying,” said Holden Lewis, a senior mortgage analyst at Bankrate.com.
Bankrate.com surveyed a national sample of 1,000 adults and found that 35 percent did not know their mortgage interest rate. One in 7 mortgage holders were either “not too confident,” “not at all confident” or had no idea about their rate.
“I’d have to ask my wife,” said one borrower who asked not to be identified.
Most borrowers know within a general range, especially if they bought their home or refinanced their loan within the past five years.
“Our mortgage guy told us, ‘Go home and frame this, it’s the lowest I’ve seen in a long time,'” said Wesley Smith, who owns a home in Utah. Smith, however, was unsure of the exact rate. “I think 2.7, well it’s in the high 2s.”
Lenders say the finding is not at all surprising. Homebuying is stressful, and most borrowers are honed in on what their monthly payment will be, not how they get to that payment.
“They’re in the heat of the moment, they’re talking about rate, but really at the end of the day they’re more focused on completing the process,” said Matt Weaver, senior mortgage loan originator for PMAC Lending Services in Florida. “Once it’s closed, it’s just ‘Said it, forget it.'”
Most borrowers know the general range, Weaver said, with somewhere between a half and a quarter percentage point variance. That variance, however, can translate into meaningful savings, especially in today’s changing lending environment. Mortgage rates have been dropping lately, and there are new lower-cost mortgage alternatives from the government.
Those two combined could make a refinance worthwhile, that is, if the borrower knows enough to apply.
“The issue is not so much that they don’t know their mortgage rate, it’s that they don’t know that rates are a whole lot lower now,” said Lewis.
He recommends that borrowers check the current rates, and if they’re not sure of their own rate, they should go check to make sure they’re not missing out on an opportunity for savings; that is … if they know where their paperwork is.