Greetings, homeowners! Are you thinking about refinancing your mortgage but unsure about the rates? You’ve come to the right place. In this article, we’ll discuss everything you need to know about current refinance loan rates, including how to get the best deal and FAQs about the process. So, grab your coffee, sit back, and let’s dive in!
The Basics of Refinancing
Before we get into the current rates, let’s review the basics of refinancing. Refinancing your mortgage means replacing your current loan with a new one that has better terms or rates. The two main types of refinancing are rate-and-term and cash-out. In a rate-and-term refinance, you change the interest rate, term, or both. In a cash-out refinance, you take out a new loan for more than what you owe and receive the difference in cash.
Why Refinance?
There are several reasons why homeowners choose to refinance their mortgages, including:
Reasons to Refinance |
Description |
|---|---|
Lower monthly payment |
Refinancing may lower your interest rate, which can reduce your monthly payment. |
Shorten the loan term |
Refinancing into a shorter loan term can help you pay off your mortgage faster and save money on interest. |
Convert an ARM to a fixed-rate mortgage |
Refinancing can provide stability by converting an adjustable-rate mortgage to a fixed-rate mortgage. |
Tap into home equity |
A cash-out refinance can allow you to access your home equity and use the funds for home improvements or other expenses. |
The Current Refinance Loan Rates
Now, let’s get to the good stuff – the current refinance loan rates. The rates vary depending on several factors, including the type of loan, your credit score, and the amount of equity you have in your home. As of August 2021, the average refinance rates according to Bankrate.com are:
Loan Type |
Interest Rate |
APR |
|---|---|---|
30-year fixed refinance |
3.030% |
3.200% |
15-year fixed refinance |
2.290% |
2.480% |
5/1 ARM refinance |
2.930% |
3.940% |
It’s important to note that these rates are averages and can change daily. It’s best to shop around and compare rates from multiple lenders to get the best deal.
FAQs About Refinancing
1. How long does the refinancing process take?
The refinancing process can take around 30-45 days, but it can vary depending on your lender and the complexity of your loan.
2. What credit score is needed to refinance?
Most lenders require a credit score of at least 620 to refinance. However, the higher your credit score, the better your rates may be.
3. Can I refinance if I have less than 20% equity in my home?
Yes, you can refinance with less than 20% equity, but you may need to pay for private mortgage insurance (PMI) if your loan-to-value ratio is higher than 80%.
4. Can I refinance if I have a low income?
Yes, you can still refinance if you have a low income. However, you may need to provide additional documentation to prove your ability to repay the loan.
5. How much does it cost to refinance?
Refinancing can cost between 2% to 6% of your loan amount. The costs can include an appraisal fee, title search, application fee, and other closing costs.
6. Can I refinance my mortgage more than once?
Yes, you can refinance your mortgage as many times as you’d like, as long as it makes financial sense for you.
7. Can I switch from an adjustable-rate mortgage to a fixed-rate mortgage?
Yes, you can switch from an adjustable-rate mortgage to a fixed-rate mortgage through a rate-and-term refinance.
8. Can I refinance if I have a second mortgage?
Yes, you can refinance if you have a second mortgage. However, the process may be more complicated, and you may need to get approval from the second mortgage lender.
9. Can I refinance if I’m behind on my mortgage payments?
It’s possible to refinance if you’re behind on your mortgage payments, but it may be difficult to find a lender willing to work with you. You may need to work with your current lender to come up with a plan to catch up on your payments.
10. How can I get the best refinance rates?
To get the best refinance rates, you should shop around and compare rates from multiple lenders. You should also work on improving your credit score and building equity in your home.
11. Can I refinance if my house has decreased in value?
It may be difficult to refinance if your house has decreased in value, especially if your loan-to-value ratio is higher than 80%. However, you may still be able to refinance through the Home Affordable Refinance Program (HARP) if you meet certain criteria.
12. Can I refinance if I’m self-employed?
Yes, you can still refinance if you’re self-employed. However, you may need to provide additional documentation to prove your income and ability to repay the loan.
13. What happens if I refinance and then decide to sell my house?
If you refinance and then sell your house, you’ll need to pay off the new loan with the proceeds from the sale. If you sell the house before the break-even point (the point at which you’ve paid off the refinancing costs), you may not recoup the costs of refinancing.
Final Thoughts
Now that you know everything about current refinance loan rates, it’s time to take action. If you’re considering refinancing, start by comparing rates from multiple lenders and deciding which type of refinance is best for your situation. Remember to factor in the costs of refinancing and the length of time you plan to stay in your home. With the right information and guidance, you can make an informed decision and save money on your mortgage.
Ready to Refinance? Let’s Get Started!
If you’re ready to take the next step and refinance your mortgage, contact us today to get started. Our team of experts can help you find the best rates and guide you through the process from start to finish. Don’t wait – start saving money on your mortgage today!
Disclaimer
The information in this article is for informational purposes only and should not be taken as financial advice. Please consult with a financial professional before making any financial decisions.