(WXYZ) — Nathanael Soto and Jogenia Gonzlez wanted to take advantage of lower mortgage rates, so they recently refinanced for big monthly savings.
"Before I was paying 4.7%, now it dropped to 2.8%, we are saving about $400 dollars,” the pair said.
So why don’t more homeowners do what they did?
“Despite the prospect of saving thousands of dollars off their loan, many homeowners are not refinancing their loans to take advantage of these historically low-interest rates," Octvio Blanco from consumer report said. "And we know that’s especially true for minority homeowners.”
A recent study found that only 6% of all refi applications came from Black borrowers, while only 9% came from Latinos.
Refinancing often takes some time and money. Banks need all of the same information you provided when you are first approved for a mortgage.
It can feel overwhelming for some and not worth it.
Add to that the COVID-19 pandemic which hit Black and Latino communities much harder than other groups—and you can begin to see why communities of color don’t refinance at the same rate as their white neighbors.
But there are some ways to close that gap.
Consumer reports says working with a hud-approved housing counseling agency can help answer your questions and get you started.
“They can help you get your documents in order, explain what refi options are best suited for you, assist you in calculating the costs of a refi and how long it’ll take to pay those back,” Blanco said.
They might suggest shopping around beyond your current lender and applying to several banks for refinancing. This could improve your chances of getting approved. You might even find a better rate.