Thanks to the recent decline in mortgage rates, which have since inched up some, the so-called “refinanceable population” has swelled 30% to 6.7 million homeowners.
These are the folks that Black Knight Financial Services singled out as standing to benefit from a refinancebased on the related costs and savings.
The company looked at this population two months ago and found that a refinance would prove advantageous for just 5.2 million homeowners based on their broad-based eligibility criteria.
That number was also on the decline and expected to dip quite a bit after the Fed raised rates for the first time since 2006. But then the stock market plummeted and with it the 10-year yield, which pushed mortgage rates back toward record lows.
The comments above came from Colin Robertson in his The Truth about Mortgage Blog. Colin makes the argument that if everyone refinanced we could save $20 Billion that would flow back into the economy. So much of personal economics is psychological and in a bad economy many tend to hold onto dollars which stops dollars flowing and slows the velocity of money which can further stagnate an economy, Here is an example of the velocity of money.
In a very small economy, a farmer and a mechanic, with just $50 between them, buy new goods and services from each other in just three transactions over the course of a year
- Farmer spends $50 on tractor repair from mechanic.
- Mechanic buys $40 of corn from farmer.
- Mechanic spends $10 on barn cats from farmer.
then $100 changed hands in the course of a year, even though there is only $50 in this little economy. That $100 level is possible because each dollar was spent on new goods and services an average of twice a year, which is to say that the velocity was 
. Note that if the farmer bought a used tractor from the mechanic or made a gift to the mechanic, it would not go into the numerator of velocity because that transaction would not be part of this tiny economy’s gross domestic product (GDP)
Many economists hold that the faster the speed of money the better the economic conditions. $20 Billion available can help to keep our economy on a firm foundation.
Give me a call and refinance now; it will help you and our economy !
Doug Jones nmls 286668
(408) 975-2400 x 110
Mortgage Magic
