There are approximately 526,000 households in Southeast MIchigan with existing mortgages, according to the US Census Bureau, American Housing Survey. The median amount owed on these homes is $115,000.
Yesterday, there was extraordinary news for many of these borrowers and for Detroit area banks, credit unions, and mortgage companies
According to The Federal Home Loan Mortgage Corporation (Freddie Mac), mortgage rates have hit an all-time low of 2.86%.
With interest rates at this new level, 20 million American homeowners can now refinance their existing mortgage, according to Black Knight, a data analytics company specializing in homeownership life cycles.
By refinancing an existing mortgage, a Metro Detroit homeowner could considerably reduce the length of their loan or lower the amount
of their monthly payments.
Local banks, credit unions, and mortgage companies create a great deal of revenue from refinancing.
Generally, a lender can expect to earn two to five percent of the loan principal amount in closing costs, according to BankRate.com. For a $200,000 mortgage refinance, for example, closing costs could generate between $4000 and $10,000.
For local financial companies to claim a significant share of the expanding refi market requires advertising. By any metric, advertising on Detroit radio is the most effective way to reach homeowners.