Mortgage rates began 2021 at a place no one would have believed a year ago.

The 30-year fixed-rate dropped more than a full percentage point between January 2020 and January 2021.

While analysts expect low mortgage rates for the foreseeable future, upward pressure is being applied by new aggressive plans to provide financial assistance to fuel the post-COVID-19 economic rebuild.

Vaccination programs are underway, and many epidemiologists believe the U.S. could return to a state of semi-normalcy by June.

More financial assistance bills are likely to pass with a Democratic majority in both houses of Congress.

Beyond that, Freddie Mac is forecasting stronger economic growth in 2021, which could further push rates away from their historic lows.

But there are still millions of homeowners who could benefit from a refinance but have so far chosen not to do so. With the current rates, those borrowers could still save hundreds of dollars per month.

Americans with mortgages saw home equity increase by an average of $17,000 in 2020, reaching a total of $1 trillion.

But saving on house payments is just one way to use a refinance loan. Many homeowners use the equity as collateral to take out a little extra cash.

That means taking out a new mortgage loan for more than what is owed on the house, paying off the old loan, and keeping the difference.

Borrowers can spend the money on whatever they wish, from remodels to business ventures, or large purchases or college tuition.

It's often a prudent financial move to use the cash to pay off other existing higher-interest debt, such as credit cards, student loans and car payments. Paying off debts may also improve your credit score.

Some older borrowers may opt for a special home equity loan called the Home Equity Conversion Mortgage, also called a reverse mortgage. Available to Americans 62 or older, this flexible vehicle can replace to traditional retirement or other savings plans, which can be vulnerable or underfunded.

The jaw-dropping rates at the end of 2020 were fitting conclusion to the roller-coaster year.

If you're a current homeowner looking for more favorable loan conditions, Bay Equity may be able to help.

Our experienced loan officers can help you figure out if a refinancing makes good financial sense. Veterans options are available as well. Call to enjoy a free, informative conversation today.