If you have been attempting to ascertain the most favorable mortgage refinance rates prior to taking any significant actions, this is the solution you have been seeking.
The emergency rate cuts implemented by the Federal Reserve in March had an impact on mortgages. As of May, mortgage interest rates experienced a significant decrease, reaching a new all-time low. Refinancing mortgage loans to obtain a lower interest rate can result in substantial savings, leading to reduced monthly payments and potentially shortening the duration of the loan.
However, it is important to keep in mind that the concept of a one-size-fits-all theory does not hold true when it comes to refinance rates. It is crucial to compare rates in order to discover lower rates. Credible offers assistance in comparing mortgage lenders, allowing you to save money on your monthly payments and more through their online tools. Checking personalized rates is a quick process that only takes three minutes and does not have any impact on your credit score.
What are mortgage rates today?
Freddie Mac reported that on September 10, the average rate for a 30-year fixed mortgage reached a historic low of 2.86%, marking a decrease of 0.07% compared to the previous week’s rate of 2.93%. Additionally, the rate for a 15-year fixed mortgage also experienced a decline, dropping from 2.43% to 2.37% during the same time frame.
5 ways to get the lowest mortgage refinance rates
Compare rates and multiple lenders
It is a time-consuming process to find the most favorable mortgage refinance rates. One must dedicate time to compare rates offered by various lenders. Credible provides a platform where you can conveniently compare multiple lenders, ensuring that you achieve your personal finance objectives. Discover the potential savings on your loan amount by opting for refinancing today.
Do not hesitate to obtain multiple online quotes for mortgage refinancing and even utilize them as a bargaining tool to encourage refinance lenders to compete for your business.
Additionally, one can utilize a refinance calculator to assess whether the potential savings outweigh the expenses associated with refinancing.
Step 2: Boost your credit score
It is of utmost importance to be aware of your credit score in advance . According to Mike Dulla, the president of United Home Loans, individuals with a credit score of 740 or higher will generally have the opportunity to obtain the most favorable rates for conforming refinances (loans of $510,400 or less).
If your credit score is below average, obtaining approval for a loan can be challenging. However, there are various methods available to quickly enhance your score. These include:
- Paying bills on time
- Asking for a higher credit limit
- Keeping your credit card balance low
- Getting added as an authorized user
- Fixing credit report errors
Are 15-year loans a good idea?
Dulla highlights that the current interest rates for 15-year fixed loans range from the mid to high 2s. He emphasizes that opting for this loan type allows you to pay significantly lower interest compared to a 30-year fixed loan. Additionally, the shorter loan term will assist you in paying off your existing mortgage at a much faster pace.
Is it a good idea to cash-out refinance?
Dulla stated that it is not advisable to withdraw more than $2,000 in cash during a refinance if it is not necessary. Currently, Fannie Mae, Freddie Mac, and various banks do not support cash-out refinances, which involve obtaining a new loan to repay existing debt and borrowing additional funds against the home’s value for cash.
According to his statement, opting for a cash-out refinance will entail a higher interest rate. In case you receive an amount exceeding $2,000 during the closing, Fannie Mae and Freddie Mac will categorize it as a cash-out refi.