LendingTree Survey Shows Some Homeowners May Have Benefited as a Result of the
Housing Market Crash
Homeowners shaved on average two percentage points off mortgages after
CHARLOTTE, N.C., Dec. 10, 2012
CHARLOTTE, N.C., Dec.10, 2012 /PRNewswire/ --Mortgage refinancing activity
outpaced first-purchase mortgage transactions by nearly a 2 to 1 margin,
according to a new LendingTree survey of 1,060 homeowners conducted online by
Research Data Technology, Inc. from November 16 toNovember 27, 2012. Nearly
60 percent of homeowners refinanced an existing mortgage, a third obtained a
purchase mortgage, and 10 percent did both. Homeowners shaved on average two
percentage points off their mortgages after refinancing, saving thousands of
dollars over the mortgage term.
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Of those homeowners who refinanced their mortgages,62 percent opted for a
mortgage of the "same term" as their original loan, while 27 percent shortened
the term of their mortgage. Eleven percent refinanced for a "longer term."
"The long-term benefits of shorter term mortgages are substantial, but you
need to identify your financial priorities. Depending on your current rate,
you may be able to reduce your mortgage term, build more equity and pay off
your mortgage in half the time with very little impact to your monthly
mortgage payment," said, Doug Lebda, chairman and CEO of LendingTree. "The
current record low interest rates present a unique opportunity for homeowners
to shorten their mortgage terms and save hundreds, maybe thousands of dollars
over the course of their mortgage, given they can qualify for a refinance and
can afford a higher monthly payment."
For the week of November 27 – December 6, 2012, the average mortgage rate
offered by lenders on the LendingTree network was 3.49 percent for a 30-year
fixed rate mortgage, compared to 3.25 percent for a 20-year fixed rate
mortgage, and 2.86 percent for a 15-year fixed rate mortgage.
The chart below illustrates the interest rate savings of refinancing into
shorter term mortgages. While mortgage payments increase slightly as the term
shortens, the savings on interest grows dramatically.
Loan Monthly Interest Paid
December 2012 Rate from Current
Amount Payment Life of Loan
Current loan 5.50% $250,000 $1,419.00 $261,010.10 0
30-year Fixed Rate 3.49% $250,000 $1,121.22 $153,638.00 $107,372.10
20-year Fixed Rate 3.25% $250,000 $1,417.99 $90,317.46 $170,692.64
15-year Fixed Rate 2.87% $250,000 $1,710.87 $57,955.94 $203,054.16
About the Survey
1,060 homeowners shared their views on the process and experience of obtaining
a mortgage. These homeowners obtained a purchase mortgage or refinanced an
existing mortgage in 2009 or later. They participated in an online survey
conducted by Research Data Technology, Inc. on behalf of LendingTree, LLC on
November 16 – 27, 2012. The 1,060 survey respondents represent a random sample
of homeowners selected from a consumer panel of individuals in the U.S. who
have access to the Internet. The margin of error in this survey is +/- 3.0%.
This means that in 19 cases out of 20, survey results based on 1,060
respondents will differ by no more than 3.0 percentage points in either
direction from what would have been obtained by seeking the opinions of all
eligible individuals in the U.S. who are online.
About LendingTree, LLC
LendingTree, LLC is the nation's leading online source for competitive home
loan offers, empowering consumers during the mortgage, refinance or auto loan
process. LendingTree provides an online marketplace which connects consumers
with multiple lenders that compete for their business, as well as an array of
online tools and information to help consumers find the best loan. Since
inception, LendingTree has facilitated more than 30 million loan requests and
$214 billion in closed loan transactions. LendingTree provides access to
lenders offering mortgagesand refinance loans, home equity loans/lines of
credit, and more. LendingTree, LLC is a subsidiary of Tree.com, Inc. (NASDAQ:
TREE). For more information go to www.lendingtree.com, dial 800-555-TREE, join
our Facebook pageand/or follow us on Twitter @LendingTree.
SOURCE LendingTree, LLC
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