Are Home Owners Throwing Away $11,500?

Here’s why some homeowners throw away $11,500 a year on mortgage payments. About 20 percent of households who would benefit from refinancing are not doing it — and they could be losing out on lessening their mortgage payments by thousands of dollars over the life of the loan, according to a new report from the NBER. In analyzing a large random sample of outstanding mortgages from December 2010, researchers found that the median household could save $160 per month over the remaining life of the loan, amounting to a total savings of about $11,500.

"Despite the large stakes, anecdotal evidence suggests that many households may fail to refinance when they otherwise should," according to the report. "Failing to refinance is puzzling due to the large financial incentives involved."
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Are Home Owners Throwing Away $11,500
Here’s why some homeowners throw away $11,500 a year on mortgage payments. About 20 percent of households who would benefit from refinancing are not doing it — and they could be losing out on lessening their mortgage payments by thousands of dollars over the life of the loan, according to a new report from the NBER. In analyzing a large random sample of outstanding mortgages from December 2010, researchers found that the median household could save $160 per month over the remaining life of the loan, amounting to a total savings of about $11,500. See more