Refinance applications are 74% higher than a year ago, according to the MBA.

With rates on home loans at record lows, it’s no wonder many Americans are refinancing their homes. Add to that the coronavirus pandemic and the economic recession -- and the need to find extra cash or to cut expenses becomes even greater. In fact, refinance applications are 74% higher than a year ago, according to the Mortgage Bankers Association. “We are telling everybody who has a loan over 4% to consider refinancing, if they still have income,” said Winnie Sun, president and founder of Irvine, California-based Sun Group Wealth Partners.

While her clients get excited about the low rates and contemplate a 15-year fixed loan, Sun suggests stashing the extra money saved on those monthly payments into an emergency fund in case someone loses their job or the pandemic lasts longer than expected. If they are able, they can pay more each month to bring down the principal, but have the option to cut back, if needed. “We are in very unprecedented times and because most Americans don’t have emergency funds and many Americans are out of work, it’s important to be realistic about money,” Sun said.

Source: CNBC