American homeowners are missing out on $5.4 billion says study
If American homeowners were to refinance their mortgages, they would have an extra $5.4 billion in their pockets but it seems mortgage brokers’ marketing isn’t demanding attention.
That’s the conclusion of a study by Bingham Young University economics professor Jaren Pope, who found that 20 per cent of those who could have refinanced when interest rates dropped didn’t.
"There's a potential problem when one out of five homeowners is paying more than they should," Pope said. "Buying a house initially is a big financial decision. But it's also financially a big deal to refinance when it's optimal to do so."
Pope’s study, published in the Journal of Financial Economics, looked at 1 million mortgages from December 2010 and calculated that the median household could have saved $1,920.
So why didn’t those homeowners take action?
Pope teamed up with a non-profit and sent letters to homeowners in Chicago offering a pain-free refinancing option, pre-approved with no upfront costs.
"Through the nonprofit, we offered homeowners the best-case scenario for refinancing," Pope said.
The letter only prompted responses from 16 per cent and a follow-up study found that 25 per cent hadn’t even opened the envelope and a third intended to respond but didn’t get round to it.
"But there seems to be a whole host of behaviors like inattention and procrastination that are preventing people from taking the time now to receive long-term benefits," added the professor.
This is the best time to list a home according to Zillow
Those wanting to sell their home during the spring season shouldn’t be too quick of the mark to list, waiting could mean a faster sale and a higher price.
According to analysis from Zillow, waiting until late spring may be a better strategy…along with listing on a Saturday! It found that those homes listed in the first two weeks of May sold around 9 days faster and for almost 1 per cent more.
"With 3 percent fewer homes on the market than last year, 2017 is shaping up to be another competitive buying season," said Zillow Chief Economist Dr. Svenja Gudell. "Many home buyers who started looking for homes in the early spring will still be searching for their dream home months later. By May, some buyers may be anxious to get settled into a new home— and will be more willing to pay a premium to close the deal."
The study also found that homes first listed on a Saturday averaged 20 per cent more viewings than those on other days.
Homeowners happier with insurance claims says J.D. Power
Homeowners’ satisfaction with their insurance companies increased in 2016 following poor results in the previous year.
The study by J.D. Power found that, despite a 10-year high for catastrophic events, there was generally higher levels of satisfaction for those making a claim.
However, when it comes to water-related incidents and certain other claims following incidents which cause lifestyle disruption, there is still work to be done by the insurance industry.
Amica Mutual and The Hanover achieved the highest satisfaction rankings, followed by Nationwide, Encompass and Chubb.