Could a Cash Out Refinance Be a Better Solution Than Mortgage Forbearance?

Posted on April 16th, 2020

The current solution for those struggling to make mortgage payments due to COVID-19 is mortgage forbearance.

It allows homeowners to “pause” mortgage payments for anywhere from six to 12 months while their income is reduced or completely nonexistent.

Once it comes to an end, the homeowner must repay the missed payments, either by making a lump sum payment or getting on some kind of repayment plan.

But what about instead of forbearance, the borrower simply executed a cash out refinance and used the proceeds to cover expenses until they got back on track?

This is an interesting idea floated by Urban Institute VP Laurie Goodman and Brookings fellow Aaron Klein.

While taking on more debt doesn’t sound like the most sensible plan when you already can’t make ends meet, homeowners are currently sitting on a mountain of home equity.

During the previous housing crisis, a streamlined refinance program called the Home Affordable Refinance Program (HARP) was implemented to lower monthly mortgage payments for roughly 3.4 million Americans.

It allowed homeowners to refinance even if they didn’t have sufficient equity in their home, or in most cases, negative equity. And they could do so with limited documentation and no home appraisal.

The argument was that it didn’t increase risk to Fannie Mae and Freddie Mac because these homeowners wound up with lower monthly payments, even if they didn’t traditionally qualify for a mortgage refinance.

Homeowners Don’t Have Cash, But They’ve Got Equity

housing market value

Today, we face a different challenge – homeowners don’t have cash on hand to make mortgage payments while their employment is disrupted by the coronavirus epidemic.

However, many homeowners have a ton of home equity, perhaps hundreds of thousands of dollars of it.

Collectively, there’s apparently $19.7 trillion in home equity and $11.1 trillion in household debt (mortgages).

Some $6.88 trillion of that is agency debt, backed by Fannie Mae, Freddie Mac, or Ginnie Mae, which covers FHA loans, VA loans, and USDA loans.

If homeowners could somehow tap into it, and obtain a near record low mortgage rate at the same time, it could be viewed as a win-win.

After all, borrowing cash with an interest rate around 3% on a 30-year term is a pretty good deal, and one that is hard to beat elsewhere.

Goodman and Klein say one of the best ways to stimulate the economy is via refinancing, but point out that there are roadblocks currently in place.

“What is the purpose of the Fed lowering short term rates to zero and buying hundreds of billions of mortgages to lower mortgage interest rates if people cannot functionally access a mortgage?”

A Streamlined Cash Out Refinance Program?

  • Could Fannie and Freddie make it easier to get a cash out refinance
  • By waiving appraisal requirements and reducing documentation requests
  • Might be a better alternative to forbearance for borrowers and loan servicers
  • Default risk would be mitigated if LTV is 80% or less

The researchers have floated the idea of a more lenient cash out mortgage environment, by applying some of the same benefits currently available to rate and term refinances.

This includes appraisal waivers, which are hugely important right now with many homeowners and appraisers told to shelter at home and maintain social distancing.

They do note that a cash out refinance increases risk to the GSEs, but call it “marginal” since the max loan-to-value (LTV) ratio is 80%.

That leaves a healthy cushion of at least 20% in home equity should the borrower default on the mortgage in the future, or be forced to sell the property.

The pair have also called for the expansion of these appraisal waivers to cover all GSE to GSE refinancings, including cross GSE (Fannie to Freddie and Freddie to Fannie) transactions.

“Allowing for more cash out refinancings will allow households to tap into the $19.7 trillion of existing home equity to better weather this economic maelstrom, thereby resulting in fewer people falling behind on their mortgage, and reducing forbearances.”

If they’re able to reduce forbearance requests, it will also help banks and perhaps more importantly, nonbanks, survive the crisis without needing some sort of liquidity backstop.

They also warn that it’s “important to act quickly” because once a borrower receives forbearance they’re no longer eligible for a mortgage refinance.

“Many borrowers may see a cash out refinance, with the opportunity to tap into wealth while locking in the lowest rates in several generations, as preferable to forbearance.”

About the Author: Colin Robertson

Before creating this blog, Colin worked as an account executive for a wholesale mortgage lender in Los Angeles. He has been writing passionately about mortgages for nearly 15 years.

Source: thetruthaboutmortgage.com

Use These Mortgage Charts to Easily Compare Rates

Last updated on December 14th, 2020

One of the things prospective home buyers and existing homeowners seem to care most about is mortgage rates.

And for good reason – the interest rate you receive on your home loan dictates what you’ll pay each month, sometimes for as long as the next 30 years. That’s 360 months!

The rate you receive can also completely make or break your home purchase, or sway the decision to refinance a mortgage.

As such, I decided it would be prudent (and helpful) to create a “mortgage rate chart” that displays the difference in monthly mortgage payment across a variety of interest rates and loan amounts.

My New Expanded Mortgage Rate Chart

mortgage rate chart

  • I created a fresh mortgage rate chart that factors in the new record low rates
  • And the possibility of them drifting even lower over coming months and years
  • The chart is also more granular because rates are broken down by eighths as opposed to quarters
  • Also available in 50k increments if your loan amount is closer to that

mortgage rate chart 150k

These charts can make it quick and easy to compare rate quotes from mortgage lenders, or to see the impact of a daily rate change in no time at all.

After all, mortgage rate updates can happen frequently, both daily and intraday. And rates are especially erratic at the moment.

So if you were quoted a rate of 3.5% on your 30-year fixed mortgage two weeks ago, but have now been told your home loan rate is closer to 4%, you can see what the difference in monthly payment might be, depending on your loan amount.

Today, that scenario might be the opposite. A quote of 3.5% a month ago might now be 3%, or even below 3%.

That has forced me to create a new expanded mortgage rate chart that contains 30-year fixed interest rates all the way down to 2%. Whether they get anywhere close to that remains to be seen, but never say never.

I just hope I don’t have to make another chart…

Anyway, this is all pretty important when purchasing real estate or seeking out a mortgage refinance, as a significant jump in monthly mortgage payment could mean the difference between a loan approval and a flat out denial.

Or you might be stuck buying less house. Or perhaps driving until you qualify!

30-Year Mortgage Rates Chart

Mortgage Payment Chart

Click to enlarge

  • Use the 30-year mortgage rates chart above
  • To quickly ballpark monthly principal and interest payments
  • At varying interest rates and loan amounts
  • While handy for estimates, don’t forget the taxes and insurance!

My first mortgage rate chart highlights monthly payments at different rates for 30-year mortgages, with loan amounts ranging from $100,000 to $1 million.

I went with a bottom of 3.5%, seeing that mortgage interest rates were around that level recently, and generally don’t seem to go any lower than that. Well, maybe they will…one can hope.

There is certainly the possibility that fixed rates could drift back in that direction with all the trade war uncertainty and the election year on the horizon.

Regardless, one might be able to buy their rate down to around that price, assuming they want an even lower rate on their home mortgage.

For the high-end, I set interest rates at 6%, which is where 30-year fixed mortgage rates were for many years leading up to the mortgage crisis.

With any luck, they won’t return there anytime soon…though in time they could potentially surpass those levels. Eek!

Yep, they could rise even higher over time depending on what transpires in the mortgage market, but hopefully home loan rates won’t climb back to the double-digits last seen in February 1990.

That fear aside, this mortgage payment chart should give you a quick idea of the difference in monthly payments across a range of mortgage rates and loan amounts, which should save some time fooling around with a mortgage calculator.

It should also make your job easier when you compare rates from different lenders. Or when you compare your current mortgage rate to what’s being offered today.

For the record, you can use the 30-year chart above for adjustable-rate mortgages too because they’re based on the same 30-year loan term. They just don’t offer fixed rates beyond the initial teaser rate offered.

So if you’re looking at a 5/1 ARM, you can still use this chart, just know that your interest rate will adjust after those first five years are up, and the chart will no longer do you any good.

That is, unless you’re looking to refinance your mortgage to a new low rate to avoid the interest rate adjustment.

Tip: Use the charts to quickly determine the impact of a higher or lower credit score on rates. If you’re told you can get a rate of 4% with a 760 credit score or a rate of 4.5% with a 660 score, you’ll know how much marginal or bad credit can really cost.

15-Year Mortgage Rates Chart

15 Year Fixed Mortgage Payment Chart

Click to enlarge

  • The 15-year mortgage rates chart helps illustrate the massive cost difference of a shorter-term mortgage relative to a 30-year mortgage
  • Use it to determine the capability of making larger monthly payments at various loan amounts
  • And also to see if refinancing makes sense at certain interest rates
  • While payments are significantly higher, you can save a ton of money on interest while paying off your home loan in half the time

Now let’s take a look at my mortgage rates chart for 15-year fixed mortgages, which are also fairly popular, but a lot less affordable.

I used a floor of 3% and a max rate of 5.50%.  Again, rates can and probably will climb higher, just hopefully not anytime soon. Spoiler alert: They drifted lower, but not much lower than 3%.

For the record, you can obtain mortgage rates at every eighth of a percent, so it’s also possible to get a rate of 3.625%, 3.875%, 4.125%, 4.375%, and so on.

But for the sake of simplicity, I spaced it every quarter of a percent except for the jump from 5% to 5.5%.

These charts are really just a quick reference guide to get ballpark monthly mortgage payment amounts if you’re just beginning to dip your toes in the real estate pool.

If you’re getting serious about home buying or looking to refinance an existing mortgage, whip out a loan calculator to get the exact PITI payment.

Some Interesting Takeaways from the Mortgage Rate Charts

  • Monthly payment differences are larger when interest rates are higher
  • Higher mortgage rates may be worse than larger loan amounts
  • Small loan amounts are less affected by interest rate movement
  • Those with smaller loan amounts have a higher likelihood of affording 15-year payments

The lower the interest rate, the smaller the difference in monthly payment. As rates move higher, the difference in payment becomes more substantial. Something to consider if you’re looking to pay mortgage discount points.

If you look at the 30-year mortgage rate chart, the monthly payment difference on a $500,000 loan amount between a rate of 3.5% and 3.75% is $70.36, compared to a difference of $77.93 for a rate of 5.25% vs. 5.5%.

Additionally, higher mortgage rates can be more damaging than larger loan amounts. Again using the 30-year mortgage rates chart, the payment on a $400,000 loan amount at 3.50% is actually cheaper than the payment on a $300,000 loan at 6%.

So you can see where an individual who purchases a home while mortgage rates are super low can actually enjoy a lower mortgage payment than someone who buys when home prices are lower.

However, for someone purchasing a really expensive home, upward interest rate movement will hurt them more than someone purchasing a cheaper home.

Sure, it’s somewhat relative, but it can be a one-two punch for the individual already stretched buying the luxury home.

To illustrate, the difference between a rate of 5% and 5.25% for loan amounts of $300,000 and $900,000 is about $46 vs. $138, respectively.

Be Sure to Look at the Big (Payment) Picture

  • Most advertised mortgage payments only include principal and interest
  • There is a lot more that goes into a monthly housing payment
  • Including property taxes, homeowners insurance, HOA dues, PMI, and so on
  • Don’t buy more than you can afford without considering all of these items

Lastly, note that my mortgage payment graphs only list the principal and interest portion of the loan payment.

You may also be subject to paying mortgage insurance and/or impounds each month. Property taxes and homeowner’s insurance are also NOT included.

You’ll probably look at this chart and say, “Hey, I can get a much bigger mortgage than I thought.”  But beware, once all the other costs are factored in, your DTI ratio will probably come under attack, so tread cautiously.

And don’t forget all the maintenance and utilities that go into homeownership. Once you hire a gardener, pool guy, and run your A/C and/or heater nonstop, the costs might spiral out of control.

I referenced this problem in another post that focused on if mortgage calculators were accurate, in which I found that housing payments are often greatly underestimated.

So you might want to drop your loan amount by $100,000 if you think you can just get by, as those other costs will certainly play a role.

Oh, and if you want to nerd out a little bit (a lot), learn how mortgages are calculated using real math, not some fancy calculator that does it all for you.

Or just use my mortgage payment calculator and enjoy the simplicity of it all. The choice is yours.

Source: thetruthaboutmortgage.com

Lowering Your Mortgage Interest Rate (After Buying a Home)

Refinancing Your HomeSo, you’ve been living in your home for a few years since securing your home loan, and your credit score has increased! Now, it’s time to look into securing a better interest rate. First and foremost, it is important to understand how your credit initially impacts your mortgage rate.

Credit Score and Your Mortgage

Your credit score is a financial tool. It directly affects the ease at which you are able to secure financing. It also has a significant impact on your interest rate. It can be difficult to pinpoint what is and is not a good credit score for a low-interest rate. This is up to specific lenders, but it all comes down to the higher your credit score, the better the interest rate that you qualify for will be.

There are many calculators you can use to determine what a loan costs at different interest rates such as this one: Loan Comparison Calculator.

Mortgage Refinancing

A mortgage refinance is the process of taking out a new loan to pay off the previous mortgage loan that you took out on your house. Typically, if your credit score has improved, even by just a few points, you can qualify for a lower interest rate. This will help to save you a lot of money paid to interest over the many years of your mortgage length.

Simply put, if your credit score was low, or just lower than it is now when you bought the home, you are likely to have locked in a higher interest rate than you qualify for today. That is why many people will purchase a home with a lower credit score, make a series of on-time payments over the course of a year or two to establish the ability to pay the loan and boost their credit. This shows responsibility. They will then benefit from a refinance.

Current Interest Rates

It should be noted that it is also a good idea to take a look at the current market mortgage and refinance interest rates. Coupling an improved credit score with lower overall interest rates is a win-win. The overall goal is to lower that payment and doing so at the best time will save you cash in the long run.

You can always check the current mortgage interest rates HERE.

Mortgage Refinance Process

To refinance, take a look at where you would like to be and do your research to determine the feasibility of that number by taking into account your credit score and the current market analytics. Know what your exact credit score is. Look at what your equity in your home is in excess of what you owe the bank on your current mortgage. You can do this by checking your mortgage statements for your current balance. From here, you can work with a real estate agent to determine the current estimated value of your home.

It is important to note that after finding a lender that you would like to go with for your mortgage refinance, many lenders require an appraisal of your home. You will have a closing for this mortgage, similar to that of your first mortgage. It is not a terribly long process, but it certainly requires some assistance from the lender.

Mortgage Refinance Benefits

After all, is said and done, your mortgage refinance not only secures a better interest rate, but it helps to create more cash available to you each month after you pay your lowered monthly mortgage. You may have even been able to refinance into a lower term, allowing you to pay off the home faster. This was all made possible by boosting that credit score!

Source: creditabsolute.com

How Lenders Determine Your Mortgage Interest Rate

Determining Your Mortgage Interest RateWith the cost of homes steadily rising, it wouldn’t be surprising if people were looking for a way to save even the smallest amount of money on their home purchase. And between the down payment, closing costs, inspections, PMI, and more, the cost of a home can quickly add up.

Paying interest on your mortgage isn’t avoidable, but you don’t have to feel like you don’t have any control over how much you pay. As you start the homebuying process, you’ll want to consider what factors into the total cost of your loan. The reason being you can improve your chances of saving some cash, especially when it comes to your interest rate.

To ensure you can get the best deal possible, it would be beneficial to understand how mortgage interest works as well as how lenders determine your mortgage interest rate.

How does mortgage interest work?

Mortgage interest, which is a fee charged by a lender for lending money to a borrower, will vary from person to person and lender to lender. Every month when you make your mortgage payment, mortgage interest will account for a portion of that payment. In fact, a majority of the payment is used to pay down interest, while only a small portion is used to pay down the principal balance, or the loan amount.

However, as you continue to make loan payments, and the principal balance decreases, your interest will also decrease. With this change in the amount of interest that is to be paid, more of your payment will go towards the principal balance. With the mortgage interest rate having an impact on the total cost of the loan and your monthly payments, a lower interest rate is better.

What factors affect my mortgage interest rate?

Your lender determines your mortgage interest rate. They do so using a variety of factors that will ultimately help them get a clear picture of your finances and your ability to repay the loan.

Lenders will use seven different factors to determine the mortgage interest rate:

  • Credit score: Number used to confirm a consumer’s creditworthiness.
  • Home location: State of home.
  • Loan type: Conventional, VA, FHA, or other special loan programs.
  • Loan amount: The total cost of the home and closing costs minus the down payment.
  • Loan term: The time borrowers have to repay their loan.
  • Down payment: A percentage of the loan amount paid at closing.
  • Type of interest rate: Fixed interest rate stays the same, while adjustable interest rate changes based on the market.

Using the abovementioned factors, lenders will be able to determine your interest rate. Every lender will offer a range of mortgage interest rates, so before applying, you may be able to confirm the rates offered to get a better idea of what the total cost of your mortgage might be.

For example, if a lender’s rates fall between 3.40% and 9.22%, your rate will be between 3.40% and 9.22%. Using a mortgage calculator, you can calculate the cost of your loan and your monthly payments. Of course, if a lender’s rates are too high, you have the option to shop around and look into other lenders who offer something more affordable for your budget.

Next to buying a car, buying a home is likely one of the largest purchases you will make in your lifetime. You might even buy more than one, but as a first-time homebuyer, you may not be 100% sure how to get the best deal. And considering how much people pay in interest, you want to be sure you are getting the best deal.

Source: creditabsolute.com

Today’s mortgage rates see highest mark since June 2020 | February 26, 2021 – Fox Business

Our goal here at Credible Operations, Inc., NMLS Number 1681276, referred to as “Credible” below, is to give you the tools and confidence you need to improve your finances. Although we do promote products from our partner lenders, all opinions are our own.

Check out the mortgage rates for February 26, 2021, which are trending up from yesterday. (iStock)

Based on data compiled by Credible Operations, Inc., NMLS Number 1681276, mortgage rates have risen since yesterday.

  • 30-year fixed mortgage rates: 3.125%, Up from 3.000%, +0.125
  • 20-year fixed mortgage rates: 3.125%, Up from 2.875%, +0.250
  • 15-year fixed mortgage rates: 2.500%, Up from 2.250%, +0.250

Rates last updated on February 26, 2021. These rates are based on the assumptions shown here. Actual rates may vary.

To find the best mortgage rate, start by using Credible, which can show you current mortgage and refinance rates:

Browse rates from multiple lenders so you can make an informed decision about your home loan.

Looking at today’s mortgage refinance rates

Today’s mortgage refinance rates have risen since yesterday, with 30-year fixed mortgages jumping 375 basis points overnight. The average rates for all loan types surpassed 3%, and stopping at 3.083% after holding steady all week. If you’re considering refinancing an existing home, check out what refinance rates look like:

  • 30-year fixed-rate refinance: 3.375%, Up from 3.000%, +0.375
  • 20-year fixed-rate refinance: 3.375%, Up from 3.000%, +0.375
  • 15-year fixed-rate refinance: 2.500%, Up from 2.375%, +0.125

Rates last updated on February 26, 2021. These rates are based on the assumptions shown here. Actual rates may vary.

A site like Credible can be a big help when you’re ready to compare mortgage refinance loans. Credible lets you see prequalified rates for conventional mortgages from multiple lenders all within a few minutes. Visit Credible today to get started.

Current mortgage rates

Mortgage interest rates continue to soar, with the average 30-year fixed mortgage rate up to 3.125%, which surpasses highs not seen since June 2020. Averages rates across all loan types continue to push toward 3%.

Current 30-year mortgage rates

The current interest rate for a 30-year fixed-rate mortgage is 3.125%. This is up from yesterday.

Current 20-year mortgage rates

The current interest rate for a 20-year fixed-rate mortgage is 3.125%. This is up from yesterday.

Current 15-year mortgage rates

The current interest rate for a 15-year fixed-rate mortgage is 2.500%. This is up from yesterday.

You can explore your mortgage options in minutes by visiting Credible to compare current rates from various lenders who offer mortgage refinancing as well as home loans. Check out Credible and get prequalified today, and take a look at today’s refinance rates through the link below.

Rates last updated on February 26, 2021. These rates are based on the assumptions shown here. Actual rates may vary.

How mortgage rates have changed

Today, mortgage rates are up compared to this time last week.

  • 30-year fixed mortgage rates: 3.125%, up from 2.750% last week, +0.375 
  • 20-year fixed mortgage rates: 3.125%, up from 2.750% last week, +0.375
  • 15-year fixed mortgage rates: 2.500%, up from 2.125% last week, +0.375

Rates last updated on February 26, 2021. These rates are based on the assumptions shown here. Actual rates may vary.

If you’re trying to find the right rate for your home mortgage or looking to refinance an existing home, consider using Credible. You can use Credible’s free online tool to easily compare multiple lenders and see prequalified rates in just a few minutes.

How to get low mortgage rates

Current mortgage and refinance rates are affected by many economic factors, like unemployment numbers and inflation. But your personal financial history will also determine the rates you’re offered.

If you want to get the lowest possible monthly mortgage payment, taking the following steps can help you secure a lower rate on your home loan:

It’s also a good idea to compare rates from different lenders to find the best rate for your financial goals. According to research from Freddie Mac, borrowers can save $1,500 on average over the life of their loan by shopping for just one additional rate quote — and an average of $3,000 by comparing five rate quotes.

Credible can help you compare current rates from multiple mortgage lenders at once in just a few minutes. Are you looking to refinance an existing home? Use Credible’s online tools to compare rates and get prequalified today.

Mortgage interest rates by loan type

Whether you’re a first-time homebuyer shopping for a 30- or 15-year mortgage, or you’re looking to refinance an existing home, Credible can help you find the right mortgage for your financial goals.

Before you fill out your mortgage application, check out these loan rates, which you’ll be able to compare by annual percentage rate (APR) as well as interest rate:

Mortgage refinance:

Home purchase:

Source: foxbusiness.com

22 Cities Where Home Appreciation Is Spiking

Couple looking at their old home
Photo by Hurst Photo / Shutterstock.com

Extreme demand for homes is pushing home values up at a rate not seen since before the Great Recession, a new Zillow report finds.

Several trends — including new millennial homebuyers, record-low interest rates, trends related to the coronavirus pandemic and the relatively small pool of homes for sale — have converged to heat up the market. The hot sellers’ market is a contrast to flat growth in rental prices nationally, as we reported in “Rent Prices Have Dropped in These 9 Formerly Hot Markets.”

The Zillow Home Value Index rose 9.1% from January 2020 to January 2021, the report says. Year-over-year home value growth hasn’t been this high since June 2006.

That rate may even pick up a bit: Zillow economists expect values to rise 10.1% from January 2021 to January 2022.

The demand has shortened the length of time that homes stay on the market, to a median of just 18 days as of mid-January. Compare that to 46 days at the same time last year and the year before.

A demographic bomb is a factor in the hot market. Millennials — defined by Zillow as Americans ages 25-34 — are entering their peak homebuying years. The number of these millennials increased by 12% — or, about 4.9 million people — between 2010 and 2020.

The generation’s size adds to the housing demand. Also, younger buyers are less likely than older ones to sell a previous home when they buy, which is expected to help keep the pool of homes for sale tight.

Government-stoked low mortgage rates — averaging 2.74% for a fixed-rate 30-year mortgage in January — are driving demand as buyers try to seize the opportunity to either pay less for a home or buy a more expensive one than they otherwise could.

Says Zillow:

“An extraordinary number of home buyers, with budgets supercharged by rock-bottom mortgage interest rates, are competing over a limited supply of homes for sale.”

The pandemic is a final factor. Many workers are now clocking in virtually instead of at the office, driving some to seek larger homes and others to move to smaller, more-affordable markets, Zillow says.

While home values increased in all of the 50 largest metro areas in the U.S. from January 2020 to January 2021, some have seen steeper growth rates than others.

Here are the 22 major markets where home values grew 10% or more, along with their typical home price and their home price growth rate:

  • Phoenix: $335,975 (up 17.1% from January 2020 to January 2021)
  • San Jose, California: $1,314,799 (up 14.2%)
  • Austin, Texas: $384,446 (up 13.7%)
  • Salt Lake City: $436,390 (up 13.7%)
  • San Diego: $689,361 (up 13.5%)
  • Seattle: $594,223 (up 12.8%)
  • Tampa, Florida: $257,499 (up 12.8%)
  • Milwaukee: $219,381 (up 12.1%)
  • Cincinnati: $208,352 (up 12%)
  • Providence, Rhode Island: $357,761 (up 12%)
  • Riverside, California: $433,226 (up 11.7%)
  • Buffalo, New York: $193,583 (up 11.4%)
  • Sacramento, California: $478,817 (up 11.3%)
  • Indianapolis: $204,141 (up 11.3%)
  • Memphis, Tennessee: $174,063 (up 11.3%)
  • Cleveland: $176,069 (up 11.1%)
  • Charlotte, North Carolina: $265,397 (up 10.9%)
  • Columbus, Ohio: $234,276 (up 10.8%)
  • Philadelphia: $277,775 (up 10.6%)
  • Kansas City, Missouri: $227,059 (up 10.6%)
  • Pittsburgh: $178,282 (up 10.4%)
  • Detroit: $198,979 (up 10.3%)

If you’re in the market for a new home or refinancing for your existing home, check out the mortgage rate comparison tools in Money Talks News’ Solutions Center.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Source: moneytalksnews.com

Mortgage rates climb higher to 2.97%

The average mortgage rate for a 30-year fixed loan is now just 3 basis points away from 3%, after a 16 basis point jump last week pushed mortgage rates to 2.97%, according to Freddie Mac’s Primary Mortgage Market Survey.

The average mortgage rate hasn’t risen this high since the end of July 2020, but Sam Khater, Freddie Mac’s chief economist, noted higher rates signals an economy slowly regaining its footing.

“Though rates continue to rise, they remain near historic lows,” said Khater. “However, when combined with demand-fueled rising home prices and low inventory, these rising rates limit how competitive a potential homebuyer can be and how much house they are able to purchase.”

Rising rates didn’t slow new home sales in January though, after the U.S. censes bureau reported sales of new single-family houses in January were at a seasonally adjusted annual rate of 923,000 — 4.3% above December’s rate.

“However, recent increases in mortgage interest rates threaten to exacerbate existing affordability conditions. Builders are exercising discipline to ensure home prices do not outpace buyer budgets,” said National Association of Home Builders Chief Economist Robert Dietz.


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While purchase demand hasn’t shown any sign of decline, the refi wave is showing more vulnerability. As rates rose, refi activity fell 11% according to data from the Mortgage Bankers Association.

For many potential borrowers, the opportunity to refinance is lost before the chance even arises, while other prospective borrowers are caught in a clogged loan pipeline and don’t get the opportunity to lock in that low rate.

According to HousingWire’s lead analyst Logan Mohtashami, a one-eighth to a quarter turn in mortgage rates (high or low) can move the market substantially.

“There are people who had a 4.00% rate that refinanced to 3.25% and then said, ‘Oh well now that rates are low, I’ll refinance again to 2.75%.’ But if that rate sneaks up a quarter it’s no longer ideal and it’s lost its appeal. They are going to wait for it to come back down, right? And then it doesn’t,” Mohtashami said.

Source: housingwire.com

Today’s mortgage rates rise — refinance before they go even higher | February 23, 2021 – Fox Business

Our goal here at Credible Operations, Inc., NMLS Number 1681276, referred to as “Credible” below, is to give you the tools and confidence you need to improve your finances. Although we do promote products from our partner lenders, all opinions are our own.

Check out the mortgage rates for February 23, 2021, which are trending up from yesterday. (iStock)

Based on data compiled by Credible Operations, Inc., NMLS Number 1681276, mortgage rates have risen since yesterday.

  • 30-year fixed-rate mortgages: 3.000%, Up from 2.875%, +0.125
  • 20-year fixed-rate mortgages: 2.875%, Up from 2.750%, +0.125
  • 15-year fixed-rate mortgages: 2.250%, Unchanging

Rates last updated on February 23, 2021. These rates are based on the assumptions shown here. Actual rates may vary.

To find the best mortgage rate, start by using Credible, which can show you current mortgage and refinance rates:

Browse rates from multiple lenders so you can make an informed decision about your home loan.

Looking at today’s mortgage refinance rates

Today’s mortgage refinance rates have remained largely unchanged since yesterday. Mortgage and refinance rates continue to move away from record lows, with 30- and 20-year rates holding firm at or above 3%. If you’re considering refinancing an existing home, check out what refinance rates look like:

  • 30-year fixed-rate refinance: 3.000%, Unchanging
  • 20-year fixed-rate refinance: 3.000%, Unchanging
  • 15-year fixed-rate refinance: 2.375%, Unchanging

Rates last updated on February 23, 2021. These rates are based on the assumptions shown here. Actual rates may vary.

A site like Credible can be a big help when you’re ready to compare mortgage refinance loans. Credible lets you see prequalified rates for conventional mortgages from multiple lenders all within a few minutes. Visit Credible today to get started.

Current mortgage rates

The spike in mortgage interest rates today marks a new high, with 30-year rates reaching 3.000% for the first time in 143 days. The average rate across all loan types also set a new record, topping 2.708%.

Current 30-year fixed-rate mortgages

The current interest rate for a 30-year fixed-rate mortgage is 3.000%. This is up from yesterday.

Current 20-year fixed-rate mortgages

The current interest rate for a 20-year fixed-rate mortgage is 2.875%. This is up from yesterday.

Current 15-year fixed-rate mortgages

The current interest rate for a 15-year fixed-rate mortgage is 2.250%. This is the same as yesterday.

You can explore your mortgage options in minutes by visiting Credible to compare current rates from various lenders who offer mortgage refinancing as well as home loans. Check out Credible and get prequalified today, and take a look at today’s refinance rates through the link below.

Rates last updated on February 23, 2021. These rates are based on the assumptions shown here. Actual rates may vary.

How mortgage rates have changed

Today, mortgage rates are up compared to this time last week.

  • 30-year fixed-rate mortgages: 3.000%, up from 2.750% last week, +0.250 
  • 20-year fixed-rate mortgages: 2.875%, up from 2.500% last week, +0.375
  • 15-year fixed-rate mortgages: 2.250%, up from 2.125% last week, +0.125

Rates last updated on February 23, 2021. These rates are based on the assumptions shown here. Actual rates may vary.

If you’re trying to find the right rate for your home mortgage or looking to refinance an existing home, consider using Credible. You can use Credible’s free online tool to easily compare multiple lenders and see prequalified rates in just a few minutes.

The factors behind today’s mortgage rates

Current mortgage and refinance rates are affected by many economic factors, like unemployment numbers and inflation. But your personal financial history will also determine the rates you’re offered.

Larger economic factors

  • Strength of the economy
  • Inflation rates
  • Employment
  • Consumer spending
  • Housing construction and other market conditions
  • Stock and bond markets
  • 10-year Treasury yields
  • Federal Reserve policies

Personal economic factors

  • Credit score
  • Credit history
  • Down payment size
  • Loan-to-value ratio
  • Loan type, size, and term
  • Debt-to-income ratio
  • Location of the property

How to get your lowest mortgage rate

If you want low mortgage rates, improving your credit score and paying down any other debt could secure you a lower rate. The size of your down payments also affects mortgage rates, with a low down payment likely to yield you a higher rate.

It’s also a good idea to compare rates from different lenders to find the best rate for your financial goals. According to research from Freddie Mac, borrowers can save $1,500 on average over the life of their loan by shopping for just one additional rate quote — and an average of $3,000 by comparing five rate quotes.

Credible can help you compare current rates from multiple mortgage lenders at once in just a few minutes. Are you looking to refinance an existing home? Use Credible’s online tools to compare rates and get prequalified today.

Mortgage interest rates by loan type

Whether you’re a first-time homebuyer shopping for a 30- or 15-year mortgage, or you’re looking to refinance an existing home, Credible can help you find the right mortgage for your financial goals.

Be sure to check out these loan rates, which you’ll be able to compare by annual percentage rate (APR) as well as interest rate:

Mortgage refinance:

Home purchase:

More resources on getting a home loan

Want to learn more about how to get a mortgage? Take a look at the following articles:

Source: foxbusiness.com

Today’s mortgage refinance rates move higher | February 12, 2021 – Fox Business

Our goal here at Credible Operations, Inc., NMLS Number 1681276, referred to as “Credible” below, is to give you the tools and confidence you need to improve your finances. Although we do promote products from our partner lenders, all opinions are our own.

Check out the mortgage refinancing rates for February 12, 2021, which are up from yesterday. (iStock)

Based on data compiled by Credible Operations, Inc., NMLS Number 1681276, current mortgage refinance rates increased compared to yesterday’s. Though 20-year rates bumped up by 250 basis points today, 15-year rates have not budged from 2.125% in four consecutive days.

  • 30-year fixed-rate refinance: 2.750%, Unchanging
  • 20-year fixed-rate refinance: 2.750%, Up from 2.500%, +0.250
  • 15-year fixed-rate refinance: 2.125%, Unchanging

Rates last updated on February 12, 2021. These rates are based on the assumptions shown here. Actual rates may vary.

If you’re thinking of refinancing your home mortgage, consider using Credible. Whether you’re interested in saving money on your monthly mortgage payments, or considering a cash-out refinance, Credible’s free online tool will let you compare rates from multiple mortgage lenders. You can see prequalified rates in as little as three minutes.

Current 30-year fixed-rate refinance

The current rate for a 30-year fixed-rate refinance is 2.750%. This is the same as yesterday.

Current 20-year fixed-rate refinance

The current rate for a 20-year fixed-rate refinance is 2.750%. This is up from yesterday.

Current 15-year fixed-rate refinance

The current rate for a 15-year fixed-rate refinance is 2.125%. This is the same as yesterday.

You can explore your mortgage refinance options in minutes by visiting Credible to compare rates and lenders. Check out Credible and get prequalified today.

Rates last updated on February 12, 2021. These rates are based on the assumptions shown here. Actual rates may vary.

How mortgage refinance rates have changed

Today, mortgage refinance rates have risen compared to this time last week.

  • 30-year fixed refinance: 2.750%, the same as last week
  • 20-year fixed refinance: 2.750%, up from 2.625% last week, +0.125
  • 15-year fixed refinance: 2.125%, up from 1.875% last week, +0.250

Think it might be the right time to refinance? To understand just how much you could save on monthly mortgage payments by refinancing now, crunch the numbers and compare rates using Credible’s free online tool. Within minutes, you can see what multiple mortgage refinance lenders are offering.

Rates last updated on February 12, 2021. These rates are based on the assumptions shown here. Actual rates may vary.

The factors behind today’s refinance rates

Current refinance rates, like mortgage interest rates in general, are affected by many economic factors, like unemployment numbers and inflation. But your personal financial history will also determine the rates you’re offered when refinancing your mortgage.

Larger economic factors

  • Strength of the economy
  • Inflation rates
  • Employment
  • Consumer spending
  • Housing construction and other market conditions
  • Stock and bond markets
  • 10-year Treasury yields
  • Federal Reserve policies

Personal economic factors

  • Credit score
  • Credit history
  • Down payment size
  • Loan-to-value ratio
  • Loan type, size, and term
  • Debt-to-income ratio
  • Location of the property

How to get your lowest mortgage refinance rate

If you’re interested in refinancing your mortgage, improving your credit score and paying down any other debt could secure you a lower rate. It’s also a good idea to compare rates from different lenders if you’re hoping to refinance, so you can find the best rate for your situation.

Borrowers can save $1,500 on average over the life of their loan by shopping for just one additional rate quote, and an average of $3,000 by comparing five rate quotes, according to research from Freddie Mac. Credible can help you compare multiple lenders at once in just a few minutes.

If you decide to refinance your mortgage, be sure to shop around and compare rates from multiple mortgage lenders. You can do this easily with Credible’s free online tool and see your prequalified rates in only three minutes.

Credible also has a partnership with a home insurance broker. You can compare free home insurance quotes through Credible’s partner here. It’s fast, easy, and the whole process can be completed entirely online.

Mortgage rates by loan type

Whether you’re a first-time homebuyer shopping for mortgage loans, or you’re seeking lower monthly payments on an existing home, Credible can help you keep an eye on current mortgage rates and find the right loan for your financial goals.

Be sure to check out these loan rates, which you’ll be able to compare by annual percentage rate (APR) as well as interest rate:

More resources on mortgage refinance

Want to learn more about refinancing your home loan? Take a look at the following articles:

Source: foxbusiness.com

Black Homeowners Charged Higher Mortgage Rates Than White Counterparts With Similar Incomes – ValuePenguin

Inequality is also prevalent in mortgage refinancing

The U.S. housing market continues to see historically low mortgage interest rates and rising home prices, locking many out of finding affordable real estate. Another challenge? The mortgage rate disparities between Black and white homeowners.

When compared with white homeowners with similar incomes, Black homeowners have first mortgages — the loan used to buy or refinance a home — with higher interest rates, according to a new analysis from Harvard University’s Joint Center for Housing Studies (JCHS). What’s more, white homeowners with a significantly lower income than Black homeowners also have lower interest rates.

Lending discrimination lingers in mortgage market

The analysis, authored by JCHS research analyst Raheem Hanifa, found that although mortgage rates drop as incomes rise, race can impact the rate attached to a borrower’s home loan. The median interest rate for a Black homeowner with a household income of at least $100,000 was 4.169%, while a white homeowner with the same income had a median rate of 3.946%, a 22-basis-point discount.

The largest disparity exists between Black and white homeowners earning a household income between $30,000 and $45,000. Black homeowners with this level of household income had a median interest rate of 4.506%, while the rate for white homeowners was 29 basis points lower, at 4.213%.

Not all refinances are created equal

A mortgage refinance can help you snag a lower mortgage rate and monthly payment, cash out some of your available equity or get rid of your mortgage sooner. But, according to JCHS’ analysis, Black homeowners are not reaping the same level of refi benefits as white homeowners.

While the analysis found that Black homeowners were able to refinance into a mortgage with a rate that was 22 basis points lower than their old rate, that was still 20 basis points higher than rates for white homeowners who refinanced. Additionally, refinance rates for Black homeowners were similar to those of white homeowners who didn’t go through the refi process.

Remember to shop around

Your mortgage interest rate affects your loan affordability and several factors are used to calculate that rate, including, but not limited to:

  • Your credit score
  • Your down payment amount
  • Your loan type
  • Your repayment term

A higher credit score can help you get a better interest rate. Generally speaking, mortgage borrowers with credit scores of 740 or higher may be eligible for the lowest available mortgage rates. A larger down payment can also drop your rate because it reduces your lender’s risk by shrinking the loan amount you’ll need to buy your home.

Mortgages with shorter terms tend to have lower interest rates. For example, the typical 15-year fixed-rate mortgage has an average 2.21% rate, while the average 30-year fixed-rate loan has a 2.81% mortgage rate, according to Freddie Mac’s latest Primary Mortgage Market Survey.

Rates also vary by mortgage lender, which is why it’s crucial to shop around. Identify three to five lenders and reach out for price quotes. Pay attention to and compare interest rate and closing costs estimates; you may end up saving thousands over your loan’s lifetime.

Still, if you believe you’re experiencing lending discrimination, consider filing a complaint online with the Consumer Financial Protection Bureau or by reaching out to your state’s attorney general.

Methodology: The Joint Center for Housing Studies of Harvard University’s report analyzed 2019 data from the U.S. Census Bureau’s American Housing Survey. The analysis was published in February 2021.

Source: valuepenguin.com