We want this to be a “win-win” situation and only want to get paid if we bring you value in the form of finding a personal finance option that works for you, not by selling your data to multiple lenders. Generally, our lenders pay us at the time of receiving your loan application and incorporate the cost of our services as part of the final interest rate on your loan, or in your loan amount. Although we are paid at the time of your application transmission, you only pay this cost if your loan closes. This fee is non-refundable to lenders after they receive your application. This is common practice in mortgage transactions where lenders pay brokers for performing certain services in connection with your loan. If you would prefer to minimize your rate, you may opt to buy "points" to decrease your rate. If you choose to buy points, you would pay this amount to your lender and your final interest rate on your loan or your loan amount would reflect the combined fees of points you purchased and the fee your lender paid us upon receipt of your application.
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As a Credible authority on mortgages, Chris Jennings covers topics including home loans and mortgage refinancing. His work has appeared in Fox Business and GOBankingRates.
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Today’s refinance rates
Home refinance rates rise and fall on a daily basis with changing economic conditions, central bank policy decisions, and investor sentiment. The table below shows recent trends in home refinance rates.
Last updated on Sep 24, 2023. These rates are based on the assumptions shown here. Actual rates may vary.
Refinancing during COVID-19
- Mortgage rates plummeted to historic lows. Despite the uncertainty brought on by the COVID-19 pandemic, homebuyer demand and refinance activity experienced a surge in 2020, fueled primarily by record-low interest rates. According to Freddie Mac, interest rates dipped below 3% for the first time in half a century. The 30-year fixed-rate average also declined every month in 2020.
- Loans are taking longer to process. Since homeowners have scrambled to take advantage of these historically low interest rates, there’s been a massive influx in the volume of home loan applications. The average amount of days it took to close a home refinance was up year-over-year in 2020.
- Qualifying for a loan is harder as lenders have tightened requirements.Widespread layoffs and unemployment caused by the COVID-19 pandemic have forced lenders to become more cautious about who they lend to. As a result, most lenders have implemented stricter refinance requirements. These include requesting higher credit scores, larger down payments, lower debt-to-income ratios, and more documentation.
How refinancing works
- Get a better interest rate. Homeowners may be able to qualify for a lower interest rate when refinancing their mortgage because their credit score or market conditions have improved. Because lenders offer lower rates on loans with shorter repayment terms, you may also be able to get a better rate by switching from a 30-year to a 15-year loan. It's easier to refinance into a loan with a shorter repayment term if you've built up some equity in your home.
- Lower your monthly payment. Refinancing into a loan with a lower interest rate can also lower your monthly payment. Borrowers who are primarily interested in lowering their monthly payment may also choose to refinance into a mortgage with a longer loan term. While decreasing your monthly payments, spreading out payments over a longer period of time may increase your total repayment costs.
- Take cash out of your home. If you've been making payments on your mortgage for some time, or if your home's value has increased since you bought it, you've probably got equity that you can tap through a "cash-out" mortgage refinance. Many homeowners tap their equity or take out personal loans to make home improvements or pay down high-interest debt like credit cards or student loans.
- Lock in a fixed rate. Borrowers with adjustable-rate mortgage (ARM) loans may seek to refinance into a fixed-rate mortgage to keep their monthly payments from increasing too dramatically.
- Stop paying mortgage insurance. Borrowers who put down less than 10% when buying a home with an FHA mortgage must continue making the annual insurance payments for as long as they own their home or pay off their mortgage. Borrowers making larger down payments aren’t off the hook until they’ve made payments on their loan for 11 years -- no matter how much equity they’ve gained during that time. Refinancing from an FHA mortgage into a non-FHA loan frees homeowners from FHA insurance premiums.
- Origination charges (may include loan-discount points, application fee and/or underwriting fee)
- Third-party fees (such as title insurance, appraisal, survey and pest inspection)
- Other costs (may include mortgage insurance for loans exceeding 80% of property value, homeowners insurance, HOA fees)
Getting your mortgage refinancing started
- Your name and income
- The property address
- The property's estimated value
- The amount of the mortgage (how much you want to borrow)
- Contact info for your employers for the last two years, and copies of pay stubs for anyone who will be on the mortgage
- Recent bank statements
- Two years of W-2s and tax returns
- Bank statements for two to three months
- Records of investments and securities including stocks, bonds, and life insurance
- Information about ongoing debt obligations including student loans, credit cards and car loans
- Direct lenders. Banks, credit unions and nonbank lenders that specialize in mortgages all offer loans directly to consumers. To compare mortgage rates offered by direct lenders, you'll need to provide them with specifics about your financial situation and the home you want to purchase or refinance.
- Mortgage brokers. Instead of making loans, mortgage brokers help borrowers shop for the loan that best suits their needs. Mortgage brokers often work with wholesale lenders, who may offer lower rates than direct lenders. While mortgage brokers can take much of the work out of shopping for the best rate, it's important to factor in the fee that they charge.
- Affiliated lenders. Homebuilders and real estate agencies often have affiliates that act as mortgage brokers, or make mortgage loans directly to their customers. Since they can count on their parent companies to send business their way, affiliated lenders may offer less competitive rates.