With the Federal Reserve location rates close to zero to spare the US from a complete economic downturn, mortgage rates are more competitive than they were before the pandemic. In fact, these are the lowest mortgage rates seen since 1971.
If you are someone who always wants the absolute lowest price or the best price, it is time to act. Depending on your personal financial situation (such as your credit and debt ratio) it may now be the best (and potentially only) time to get the lowest interest rates you will ever see.
Before going through the process of refinancing your mortgage, be sure to shop around to secure the best possible interest rates. You can visit an online marketplace like Credible to get a feel for your refinancing options and save money today. Pre-qualify in just three minutes.
If you have weighed a refinancing loan, you might want to get started on the process today. Here is why waiting to refinance your mortgage can actually cost you more money.
1. You could lose potential interest savings
Consumers who bought homes in the 1970s and 1980s may remember the two-digit interest rates. But most millennia and members of Gen X have lived in a “low” environment since the Great Recession in 2008. Since 2008, prices have not risen above 5%.
The reason the current rates are making news is that they are the ones lowest seen in recent history. Freddie Mac’s mortgage registrations began in 1971, and with the lowest interest rates it has seen in nearly 50 years as an indication of what we can expect in the future, interest rates can only go up from here.
Credible can streamline the refinancing process by comparing prices and lenders at once. It’s 100% free – and does not affect your credit score, so you can decide if you’m ready to refinance without worry. Find your pre-qualified prices with the click of a button.
No one can predict interest rates, especially as they fluctuate slightly from week to week. However, looking at interest rates as far back as the 1970s gives hope that interest rates will remain historically low in the coming weeks and months. But do not wait to save.
In addition, closing costs on the new refinancing loan can affect your overall savings. Therefore, it is best to use an online mortgage calculator to determine new monthly costs and if refinancing really saves money on your home loan.
2. 15-year mortgage rates may rise again
Saves on interest may not feel like money left in your pocket (especially during a pandemic), but the savings are significant when calculating interest over an entire 30- or 15-year mortgage. Those who refinance from a 30 to 15-year mortgage can see an increase in monthly payments, but can be sure that they are to pay the minimum amount in interest.
- In October 2019, the average interest rate on a 15-year mortgage was 3.14%. For a $ 400,000 loan, a borrower would pay $ 102,000 in interest over 15 years.
- Today, the average interest rate on a 15-year mortgage is 2.125%. This comes to $ 67,300 in interest on the same $ 400,000 home.
- A person who wants to refinance a 10-year mortgage today at 2.5% pays only $ 52,500 in lifetime interest on the loan.
Credible updates 30-year, 20-year and 15-year fixed rates daily so you do not have to spend valuable time searching. To get a better idea if you can save money by switching to a 15-year mortgage today, enter some basic information into Credible’s free online tools.
3. You may be hit with a new fee
You may not want to deal with any major financial planning, such as refinancing, until after the holidays – but waiting time can actually cost you more money.
Refinance by December 1, 2020 to avoid paying for a new one unfavorable market refinancing fee. Loan companies are starting to charge a 0.5% fee on all refinancing loans, so it’s an added bonus if you get your refinancing started before Thanksgiving.
To avoid paying this new fee, get off to a good start with your mortgage refinancing through the multi-lender market Credible today. With Credible’s free online tools, you can complete the entire origination process from comparing mortgage rates to closing. Start the process now.
How To Get The Best Mortgage Refinancing Rates
To get lower refinancing rates, check these four items from the list:
- Pay debt to lower your the relationship between debt and income
- Work to improve your credit with timely payments, clear up any errors and keep card balances below 30%
- Avoid opening new credit accounts
- Shop with at least three lenders to make sure you get the most competitive rate
Judging shopping is easier than ever
Do not forget to shop! Even with the current low rates, the interest rate you receive will vary by lender and yours current credit score. To get the lowest possible rate, go to Credible.
The process of refinancing your mortgage does not have to be painful. In fact, it’s easier than ever to shop around for mortgages and refinancing rates – especially with online marketplaces like Credible, where you can see multiple rates and lenders in a table.
Refinancing is not for everyone. The savings earned depend on your credit score, the interest rate you received when you first borrowed, and the size of your mortgage. (Remember to take these important ones Steps to protect your credit score during this time. Be sure you report any negative items on your credit report and check your credit score regularly).
One reported 18 million homeowners could miss out on refinancing savings. Current homeowners who want to take advantage of today’s low rates need to spend the extra time at home exploring mortgage refinancing options as a way to provide more savings in the bank.
Try Credible to Examine mortgage refinancing options and compare rates and lenders.
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