The average U.S. rate on the 30-year fixed mortgage hit a record low last week.  With mortgage rates at 3.9%, many homeowners are debating whether or not to refinance their home.  This decision will not only save a few extra dollars each month, but may help families stay in their homes.

Research by the Federal Reserve Bank of New York Staff Reports examines the correlation between payment reductions and default risk, and raises the question on whether or not changes in borrowers’ monthly mortgage payments improve future credit performance.  An extensive analysis of this relationship shows that by applying a 26% monthly payment reduction results in a decline of default rates by 3.8%.

By refinancing their home, borrowers’ are able to save an average of 25% in monthly housing expenses; money that can be used to pay for other necessities such as utilities, food, school, and clothing.  The extra money saved could be just what someone needs to stay in their home and avoid foreclosure.

As South Carolina faces unprecedented levels of foreclosure (ranked 9th nationally), the question on whether or not to refinance will be on the minds of many local homeowners.  To aid in the decision making process, many companies have developed refinancing calculators to help determine the cost/benefit ratio of refinancing.  Be sure to do your research so you can determine the best decision for you and your family.

The SC Community Loan Fund aims to limit the number of foreclosures in our local community.  By working with local and statewide agencies, CLF provides education and resources to homebuyers to help them understand the home buying process and stay within their budget.   The first of four First Time Homebuyer Workshops will take place October 27 in Georgetown.  For more information, please contact our office at 843.973.7285 or e-mail