Refinance rates are currently between 6.5% and 7.5%, but your personal interest rate will depend on your credit history, financial profile and application.
Average refinance rates reported by lenders across the US as of March 1, 2024. We track refinance rate trends using information from Bankrate.
Mortgage refinance rates change every day. Experts recommend shopping around to make sure you’re getting the lowest rate. By entering your information below, you can get a custom quote from one of CNET’s partner lenders.
About these rates: Like CNET, Bankrate is owned by Red Ventures. This tool features partner rates from lenders that you can use when comparing multiple mortgage rates.
How to select the right refinance type and term
The rates advertised online often require specific conditions for eligibility. Your personal interest rate will be influenced by market conditions as well as your specific credit history, financial profile and application. Having a high credit score, a low credit utilization ratio and a history of consistent and on-time payments will generally help you get the best interest rates.
30-year fixed-rate refinance
The average rate for a 30-year fixed refinance loan is currently 7.10%, an increase of 1 basis point over this time last week. (A basis point is equivalent to 0.01%.) A 30-year fixed refinance will typically have lower monthly payments than a 15-year or 10-year refinance, but it will take you longer to pay off and typically cost you more in interest over the long term.
15-year fixed-rate refinance
For 15-year fixed refinances, the average rate is currently at 6.60%, a decrease of 2 basis points compared to one week ago. Though a 15-year fixed refinance will most likely raise your monthly payment compared to a 30-year loan, you’ll save more money over time because you’re paying off your loan quicker. Also, 15-year refinance rates are typically lower than 30-year refinance rates, which will help you save more in the long run.
10-year fixed-rate refinance
For 10-year fixed refinances, the average rate is currently at 6.45%, a decrease of 4 basis points compared to one week ago. A 10-year refinance typically has the lowest interest rate but the highest monthly payment of all refinance terms. A 10-year refinance can help you pay off your house much quicker and save on interest, but make sure you can afford the steeper monthly payment.
To get the best refinance rates, make your application as strong as possible by getting your finances in order, using credit responsibly and monitoring your credit regularly. And don’t forget to speak with multiple lenders and shop around.
What to know about today’s refinance rates
Refinance rates dropped significantly toward the end of 2023, bringing much-needed activity to the housing market. Since early February, however, rates have climbed back into the 7% range. The increase came after recent inflation and labor data made it clear to investors that the Federal Reserve won’t start cutting interest rates until early this summer. Higher mortgage rates make refinancing less attractive to homeowners, making them more likely to hold on to their existing mortgages.
30-year fixed refinance: 7.10%
15-year fixed refinance: 6.60%
10-year fixed refinance: 6.45%
What to know about 2024 refinance rate trends
Experts say slowing inflation and the Fed’s projected interest rate cuts should help push mortgage interest rates down to around 6% by the end of 2024, but that will depend on incoming economic data.
Over 82% of homeowners currently have interest rates below 5% on their property. If home loan rates stabilize over the next several months, more homeowners should be able to save money through refinancing. Yet in order for refinance applications to pick up in a meaningful way, rates would need to fall substantially, according to Mark Zandi, chief economist at Moody’s Analytics.
For homeowners looking to refinance, remember that you can’t time the market: Interest rates fluctuate on an hourly, daily and weekly basis, and are influenced by an array of macroeconomic factors. Your best move is to keep an eye on day-to-day rate changes and have a game plan on how to capitalize on a big enough percentage drop, said Matt Graham of Mortgage News Daily.
Refinancing 101
When you refinance your mortgage, you take out another home loan that pays off your initial mortgage. With a traditional refinance, your new home loan will have a different term and/or interest rate. With a cash-out refinance, you’ll tap into your equity with a new loan that’s bigger than your existing mortgage balance, allowing you to pocket the difference in cash.
Refinancing can be a great financial move if you score a low rate or can pay off your home loan in less time, but consider whether it’s the right choice for you. Reducing your interest rate by 1% or more is an incentive to refinance, allowing you to cut your monthly payment significantly.
Refinancing in today’s market could make sense if you have a rate above 8%, said Logan Mohtashami, lead analyst at HousingWire. “However, with all refinancing options, it’s a personal financial choice because of the cost that goes with the loan process,” Mohtashami said.
Reasons to refinance
Homeowners usually refinance to save money, but there are other reasons to do so. Here are the most common reasons homeowners refinance:
To get a lower interest rate: If you can secure a rate that’s at least 1% lower than the one on your current mortgage, it could make sense to refinance.
To switch the type of mortgage: If you have an adjustable-rate mortgage and want greater security, you could refinance to a fixed-rate mortgage.
To eliminate mortgage insurance: If you have an FHA loan that requires mortgage insurance, you can refinance to a conventional loan once you have 20% equity.
To change the length of a loan term: Refinancing to a longer loan term could lower your monthly payment. Refinancing to a shorter term will save you interest in the long run.
To tap into your equity through a cash-out refinance: If you replace your mortgage with a larger loan, you can receive the difference in cash to cover a large expense.
To take someone off the mortgage: In case of divorce, you can apply for a new home loan in just your name and use the funds to pay off your existing mortgage.
I might get a little sentimental today. This is the 20th anniversary of my — well, really our — weekly column. In addition to feeling old, I also feel grateful.
It was actually slightly more than 20 years ago that I was living in Southern California, working as a freelance writer, when an editor from the Orange County Register called. The paper was launching a monthly regional magazine targeting owners of luxury homes — think Laguna and Newport Beach — and he wanted a column that would be the antidote to potentially pretentious content.
“So,” I said, “you want a column that is not about rich homeowners and their chichi architects and their museum-quality art collections and the exquisite homes they build on the bluffs overlooking the Pacific and how the whole experience was one giant lovefest, and they had money left over?”
“Right,” he confirmed, “a reality column.”
He’d found the right writer. At that point, I had built two homes from the ground up, had the debt and cortisol levels to prove it, and had an arsenal of frustrations.
Still disbelieving, I added, “You want me to write about the tile mason with the drinking problem, the neighbors who won’t speak to you because you’ve had an outhouse and a Dumpster parked in your front yard for three months, the dogs who got so fed up with the construction they ran away in search of a rescue, and about how the remodel took three times as long, cost three times as much, and you weren’t speaking to your spouse at the end?”
“Exactly,” he said. “Sprinkle in some advice. Be the girl next door who has the same problems as everyone else but is two steps ahead, because you’ve made the mistakes and know who to call.”
Eighteen months later, my then-husband and I moved from Southern California to Colorado — just one of my many moves. And soon, I had a syndicated column. That former editor congratulated me, then ominously added: “It’s great to have a weekly column, but one day, you are going to run out of ideas.”
Until then, a dry well hadn’t been on my worry list. I flashed back to when I was in kindergarten and got in trouble for talking too much in class. I wound up in the principal’s office with my mother to discuss “the problem.” When the principal asked why I talked so much, the answer was easy. “I just have so many important things to say,” I said, which was unintentionally hilarious.
So here we are 20 years and 1,040 columns later, and I still have things to say and no shortage of topics. Because I have never been able to see where home design stops and home life begins, my columns are about both. Here’s a brief look back at some of the moments we’ve been through together:
The calamities: You were there when my two custom seven-foot sofas arrived with the upholstery fabric inside out, when the back patio in our new Colorado home fell three feet into a sink hole, and when our rescue dog on his first night with us tested our commitment on the one-day-old living room carpet. (Who gets a new dog and new carpet on the same day?)
The many moves: You were there through 10 houses and nine moves, including the move to Florida, where I had a stint as a live-in home stager and moved six times in four years.
The life changes: You were there when I sent each of my children off to college, entering some sort of self-imposed dorm-decorating contest in which I was the sole contestant. You were there through my divorce and remarriage, the loss of two parents and the gain of three grown stepchildren.
The micro and macro: Together, we’ve covered the minor (how to choose drawer knobs and tea towels) and the major (the meaning of home and belonging and how to leave a meaningful legacy.
As you’re growing up, you learn about money from the people who raise you. Their lessons are based on their life experiences, which means there’s likely some bias built in.
That’s not necessarily a bad thing — you may have a savvy aunt who taught herself to manage her own money after a divorce, or a parent who cautioned you about debt because they struggled to pay down theirs. Hearing their stories can spare you from making financial mistakes. Even with all that history, though, you’re likely to make some financial decisions that will cause your relatives to wince.
Credit cards in particular can be a touchy subject in families where older generations avoid them out of the fear of costly debt, while younger generations embrace them for their rewards and convenience. Managing credit cards when it feels like you’re being “bad” can be difficult. Still, it’s totally OK to forge your own financial path based partially on family lore, and partially on your own goals and experiences.
Approach credit cards with care
If you’re a first-generation credit card user, it’s essential to understand how they work — this includes learning about the types of credit cards available, how you’re billed and what happens if you get into debt. Beware of common credit card myths, like the idea that you should carry a small balance from month to month because it’s good for your credit score (there’s no need to pay interest for the sake of your credit score).
Start by using your first credit card for a basic expense or two each month, and be sure to pay the entire balance when it’s due. You can still use cash or a debit card for some expenses, and a credit card for others.
Gloria Garcia Cisneros, a certified financial planner in San Diego, recommends using technology to help you manage your card. Automate payments to avoid missing due dates, and take advantage of apps that track spending so you don’t have to do so manually in a spreadsheet, she says. Also, create the habit of checking your credit card statements each month to review your spending, and avoid saving your credit card information on merchant websites so you’re less tempted to make impulse purchases.
Credit cards are more than a way to spend — they can help you establish your credit history, provide extra protections on purchases and can earn rewards on your everyday spending. Used carefully, credit cards can be a tool that helps you move toward other financial goals.
Lea Landaverde, the founder of the Riqueza Collective, a bilingual financial education and media company, learned this at the age of 18, when she realized she first needed to build her credit history to qualify for a rental home. “I had to learn how a credit card could benefit me.”
Examine the origins of your credit card beliefs
The messages you tell yourself about credit cards were installed in your mind long ago by loved ones who modeled certain behaviors. Credit card-related misconceptions and beliefs get passed down in families, especially when previous generations lived through difficult times. “When parents say debt is bad, they’re coming from a place of fear or trauma,” Landaverde says.
Garcia Cisneros was raised by her grandparents, who had widely different attitudes toward credit. “My grandpa was so against credit cards. He was like, ‘Cash under the mattress, cash is king,’” she says. Meanwhile, her grandmother not only used cards, but also maxed them out. “I didn’t know which one was right or wrong. When I got my first credit card, it was an emotional, impulse decision.”
Even if you’ve been financially independent for years, it’s hard to turn off that voice in your head that repeats relatives’ money beliefs that don’t match your current lifestyle. You can recognize why certain loved ones are credit card-averse, and use that family fear of debt as motivation to manage your credit cards thoughtfully.
Set boundaries with loved ones
Beware of family members who see your credit card as their funding source because they don’t understand how their actions can affect your credit. Garcia Cisneros is willing to help her family financially, but she has learned to set limits after a relative used her card while on vacation. Now, she only provides money for emergencies in the form of a loan with interest.
Celebrate your progress
As you become more confident with your credit card use, keep an eye on your credit score and pat yourself on the back when you see it go up. After all, you’re not just managing your credit card wisely, you’re creating an entirely new money mindset.
If you make a mistake or have to deal with an emergency expense and get into debt, it doesn’t have to derail your money goals forever. “You can start over,” Garcia Cisneros says. “You always have tomorrow.”
This article was written by NerdWallet and was originally published by The Associated Press.
Retirement is supposed to be a time for enjoying life after decades of work. Yet many women are in a financially precarious situation when it comes to the so-called “golden years.” In a 2023 SoFi survey, 57% of women said they aren’t saving for retirement. Similarly, 50% have no personal retirement savings according to a 2022 Census Bureau Report.
Given that women now outlive men by approximately six years, according to a recent study in JAMA, they need to save for an even longer retirement than their male counterparts. That makes the fact that they have fewer funds earmarked for retirement even more troubling.
Why aren’t women saving for the future? And how can they start financially preparing for retirement? Read on to learn about the retirement gender divide, why it exists, and some possible solutions for overcoming it.
A Look at Retirement Trends for Women and Men
There has long been a disparity in retirement savings for men and women. According to the U.S. Department of Labor, as women get older, their chances of living in poverty increase, a trend that has persisted for at least 50 years, when such data collection started.
Consider the current retirement savings divide between women and men today, as reported by respondents to the SoFi 2023 Ambitions Survey:
Retirement Savings for Women and Men in US
According to the survey of Americans ages 18 to 75, men have a median retirement savings that’s about $40,000 to $60,000 higher than women’s savings. In addition, 11% more women than men aren’t saving for retirement, and likewise 11% more women don’t know how much is in their retirement savings. In fact, 33% of women have less than $5,000 in retirement savings, the survey found.
Men
Women
Median Retirement Savings
$70,001-$80,000
$20,001-$30,000
% Not Saving for Retirement
46%
57%
% Who Don’t Know What Their Retirement Savings Is
45%
56%
*Source: SoFi Ambition Survey, 2023
This savings disparity typically begins early in adult life and accumulates over time. Employment, marriage, and motherhood all play a role.
💡 Quick Tip: Did you know that opening a brokerage account typically doesn’t come with any setup costs? Often, the only requirement to open a brokerage account — aside from providing personal details — is making an initial deposit.
How Marriage and Children Impact Retirement
Women aged 55 to 66 who have been married once tend to have more retirement savings than women who have never been married, or those who have been married two or more times. According to a recent income survey from the U.S. Census Bureau, close to 37% of women married once have no retirement savings, compared to 41% of women married two or more times and 55% who never married.
Women, Marriage and Retirement Savings*
Women Married Once
Women Married Two or More Times
Women Who Never Married
36.7% have no retirement savings
40.9% have no retirement savings
54.5% have no retirement savings
11.8% have $1 to $24,999
11.8% have $1 to $24,999
11.7% have $1 to $24,999
14.9% have $25,000 to $99,999
13.6% have $25,000 to $99,999
13.6% have $25,000 to $99,999
36.6% have $100,000 or more
33.7% have $100,000 or more
20.2% have $100,000 or more
*Source: U.S. Census Bureau, Survey of Income and Program Participation
In a divorce, some couples may be required to split their retirement savings or one may need to transfer some of their retirement funds to the other, which could be one of the reasons why the percentage of those without retirement savings is lower among women married two or more times than those who never married.
Motherhood and Money
When women have children, they often take time off from the workforce and/or may work part-time, which can have an impact on their earnings. According to an analysis by the Pew Research Center, among people 35 to 44, 94% of fathers are active in the workforce while 75% of mothers are.
Motherhood is also a time when the wage gap comes into play. In 2022, mothers 25 to 34 earned 85% of what fathers the same age did, while women without children at home earned 97% of what fathers earned, the Pew analysis found. The less money women make, the less they have to save for retirement.
Earnings for Mothers 25-34
85% of what fathers earned
Earnings for Women 25-34 Without Children at Home
97% of what fathers earned
*Source: Pew Research Center, 2023
Earning less also affects the Social Security benefits women get in retirement. While men got $1,838 a month on average in Social Security in 2022, women received on average $1,484, according to the Social Security Administration.
Retirement Is a Top Priority for Women and a Bigger Concern
While saving for retirement is the top goal for women, they are also focused on, and perhaps feeling stress about, paying off credit card and student loan debt, according to the SoFi Ambitions Survey.
Overall, women tend to perceive financial goals and success quite differently than men do. Two-thirds of female survey respondents said their marker of success is being able to feed their families. By comparison, one-third of men said their marker of success is being seen as successful, while another one-third say it’s reaching a certain income bracket.
That divergence may help explain why men are far more likely than women to consider investing a top financial goal, which could help them build retirement savings. For women, investing is at the bottom of the list of their financial priorities, perhaps out of necessity.
Women’s Financial Goals vs. Men’s Financial Goals
Women’s Financial Goals
Men’s Financial Goals
Saving for retirement: 45% Paying down credit card debt: 41% Paying down student loans: 39% Continue Investing: 33%
Continue Investing: 52% Saving for retirement: 49% Paying down credit card debt: 33% Paying down student loans: 27%
*Source: SoFi Ambition Survey, 2023
Retirement is women’s number-one goal and it’s also one of their greatest worries. One in five female respondents to SoFi’s survey said they may not be able to retire.
Those Who Worry They Won’t Be Able to Retire
Women
Men
20%
15%
*Source: SoFi Ambition Survey, 2023
That means women are 33% more likely than men to believe that retirement may not happen for them.
Even if they can retire, there is no guarantee women’s savings will cover their expenses. In fact, women are approximately 10% more likely than men to say they are concerned about outliving their assets and having enough savings, according to a report from McKinsey Insights.
Recommended: When Can I Retire?
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Why Are Women Facing a Retirement Gap?
In addition to the financial impact of marriage, motherhood, and lower earnings, women also experience some additional barriers to retirement saving.
For instance, a report from the Global Financial Literacy Excellence Center found that women tend to score lower in financial literacy than men do. And women with lower financial literacy are less likely to save and plan for retirement, according to the research.
Women also lack confidence when it comes to investing. Only 33% see themselves as investors, according to a 2022 SoFi Women and Investing Insights analysis, and 71% of their assets are in cash, rather than in investments or a retirement account, where their funds might have the potential to grow.
Minding and Mending the Gap
So how can women and society at large move forward and start closing the retirement gap?
The first step is for everyone, across all genders and ages, to build confidence in their financial skills by learning about money, saving, and investing. Knowledge helps create strength and belief in oneself, and it’s never too early or too late to start learning.
There are numerous good resources on retirement planning, to help individuals determine how much they may need to save for retirement and strategies that could help them get there. They can also sign up for financial classes and courses, and they might even want to consult a financial advisor.
At work, employees can participate in their employer’s 401(k) plan or any other retirement savings plan offered. Because money is automatically deducted from their paychecks and placed in their 401(k) account, saving may be easier to accomplish.
💡 Quick Tip: Did you know that a traditional Individual Retirement Account, or IRA, is a tax-deferred account? That means you don’t pay taxes on the money you put in it (up to an annual limit) or the gains you earn, until you retire and start making withdrawals.
How to Start Saving for Retirement
No matter what your age, the time to kick off your retirement savings is now. Here’s how to begin.
Figure out your retirement budget.
To determine the amount you’ll need for retirement, think about what you want your life after work to look like. Do you want to move to a smaller, less expensive home? Do you hope to travel as much as possible? Having a clear picture of your goals can help you calculate how much you might need.
You can also consider the 4% rule, which suggests withdrawing 4% of your retirement savings each year of retirement so that you don’t outlive your savings. That could give you a ballpark to aim for.
Cut back on current expenses.
Take an honest look at what you’re spending right now on everything from rent or your mortgage to car payments, groceries, clothing, and entertainment. Find things to cut or trim — for example, do you really need three streaming services? — and put that money into your retirement savings instead.
Some savvy belt tightening now could help give you a more financially secure future.
Contribute as much as you can to your 401(k).
If you can max out your 401(k), go for it. You’re allowed (per IRS rules) to contribute up to $23,000 in 2024. If that much isn’t possible, contribute at least enough to get your employer’s matching contribution. That’s essentially “free money” that can help build your retirement savings.
Consider opening an IRA.
If you’ve contributed the max to your workplace retirement plan, a traditional or Roth IRA could help you save even more for retirement. You can contribute up to $7,000 in an IRA for 2024, or $8,000 if you’re 50 or older. IRAs offer certain tax advantages that may help you save money as well by lowering your taxable income the year you contribute (traditional IRA), or allowing you to withdraw your money tax-free in retirement (Roth IRA).
Diversify your portfolio.
Whatever type of retirement account you have, including a brokerage account, diversifying your portfolio — which means investing your money across a variety of different asset classes — may help mitigate (though not eliminate) risk, rather than concentrating your funds all in one area.
Just make sure that the way you allocate your assets matches your retirement goals and your risk tolerance.
The Takeaway
Women are far behind men when it comes to retirement savings, due to a number of factors, including earning lower wages, and motherhood, which can mean time away from work, costing them in lost earnings. There’s also an emotional component involved: Women are less confident about investing overall.
However, building financial strength, and educating themselves about retirement planning is a good way for women to start saving for their future. Cutting expenses and directing that money into savings instead, participating in their workplace retirement plan, and opening an IRA or investment account are some of the ways women can take charge of their finances and help position themselves for a happy and secure retirement.
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The VA home loan: Unbeatable benefits for veterans
For many who qualify, VA home loans are some of the best mortgages available.
Verify your VA loan eligibility. Start here
Backed by the U.S. Department of Veterans Affairs, VA loans are designed to help active-duty military personnel, veterans and certain other groups become homeowners at an affordable cost.
The VA loan asks for no down payment, requires no mortgage insurance, and has lenient rules about qualifying, among many other advantages.
Here’s everything you need to know about qualifying for and using a VA loan.
In this article (Skip to…)
Top 10 VA loan benefits
1. No down payment on a VA loan
Most home loan programs require you to make at least a small down payment to buy a home. The VA home loan is an exception.
Verify your VA loan eligibility. Start here
Rather than paying 5%, 10%, 20% or more of the home’s purchase price upfront in cash, with a VA loan you can finance up to 100% of the purchase price.
The VA loan is a true no-money-down home mortgage opportunity.
2. No mortgage insurance for VA loans
Typically, lenders require you to pay for mortgage insurance if you make a down payment that’s less than 20%.
This insurance — which is known as private mortgage insurance (PMI) for a conventional loan and a mortgage insurance premium (MIP) for an FHA loan — would protect the lender if you defaulted on your loan.
VA loans require neither a down payment nor mortgage insurance. That makes a VA-backed mortgage very affordable upfront and over time.
3. VA loans have a government guarantee
There’s a reason why the VA loan comes with such favorable terms.
The federal government guarantees these loans — meaning a portion of the loan amount will be repaid to the lender even if you’re unable to make monthly payments for whatever reason.
This guarantee encourages and enables private lenders to offer VA loans with exceptionally attractive terms.
4. You can shop for the best VA loan rates
VA loans are neither originated nor funded by the VA. They are not direct loans from the government. Furthermore, mortgage rates for VA loans are not set by the VA itself.
Instead, VA loans are offered by U.S. banks, savings-and-loans institutions, credit unions, and mortgage lenders — each of which sets its own VA loan rates and fees.
This means you can shop around and compare loan offers and still choose the VA loan that works best for your budget.
5. VA loans don’t allow a prepayment penalty
A VA loan won’t restrict your right to sell the property partway through your loan term.
There’s no prepayment penalty or early-exit fee no matter within what time frame you decide to sell your home.
Furthermore, there are no restrictions regarding a refinance of your VA loan.
You can refinance your existing VA loan into another VA loan via the agency’s Interest Rate Reduction Refinance Loan (IRRRL) program, or switch into a non-VA loan at any time.
6. VA mortgages come in many varieties
A VA loan can have a fixed rate or an adjustable rate. In addition, you can use a VA loan to buy a house, condo, new-built home, manufactured home, duplex, or other types of properties.
Or, it can be used for refinancing your existing mortgage, making repairs or improvements to your home, or making your home more energy-efficient.
The choice is yours. A VA-approved lender can help you decide.
Verify your VA loan eligibility. Start here
7. It’s easier to qualify for VA loans
Like all mortgage types, VA loans require specific documentation, an acceptable credit history, and sufficient income to make your monthly payments.
But, compared to other loan programs, VA loan guidelines tend to be more flexible. This is made possible because of the VA loan guarantee.
The Department of Veterans Affairs genuinely wants to make the loan process easier for military members, veterans, and qualifying military spouses to buy or refinance a home.
8. VA loan closing costs are lower
The VA limits the closing costs lenders can charge to VA loan applicants. This is another way that a VA loan can be more affordable than other types of loans.
Money saved on closing costs can be used for furniture, moving costs, home improvements, or anything else.
9. The VA offers funding fee flexibility
VA loans require a “funding fee,” an upfront cost based on your loan amount, your type of eligible service, your down payment size, and other factors.
Funding fees don’t need to be paid in cash, though. The VA allows the fee to be financed with the loan, so nothing is due at closing.
And, not all VA borrowers will pay it. VA funding fees are normally waived for veterans who receive VA disability compensation and for unmarried surviving spouses of veterans who died in service or as a result of a service-connected disability.
10. VA loans are assumable
Most VA loans are “assumable,” which means you can transfer your VA loan to a future home buyer if that person is also VA-eligible.
Assumable loans can be a huge benefit when you sell your home — especially in a rising mortgage rate environment.
If your home loan has today’s low rate and market rates rise in the future, the assumption features of your VA become even more valuable.
VA loan rates
The VA loan is viewed as one of the lowest-risk mortgage types available on the market.
Verify your VA loan eligibility. Start here
This safety allows banks to lend to veteran borrowers at lower interest rates.
Today’s VA loan rates*
Loan Type
Current Mortgage Rate
VA 30-year FRM
% (% APR)
Conventional 30-year FRM
% (% APR)
VA 15-year FRM
% (% APR)
Conventional 15-year FRM
% (% APR)
*Current rates provided daily by partners of the Mortgage Reports. See our loan assumptions here.
VA rates are more than 25 basis points (0.25%) lower than conventional rates on average, according to data collected by mortgage software company Ellie Mae.
Most loan programs require higher down payment and credit scores than the VA home loan. In the open market, a VA loan should carry a higher rate due to more lenient lending guidelines and higher perceived risk.
Yet the result of the Veterans Affairs efforts to keep veterans in their homes means lower risk for banks and lower borrowing costs for eligible veterans.
VA mortgage calculator
Eligibility
Am I eligible for a VA home loan?
Contrary to popular belief, VA loans are available not only to veterans, but also to other classes of military members.
Find and lock a low VA loan rate today. Start here
The list of eligible VA borrowers includes:
Active-duty service members
Members of the National Guard
Reservists
Surviving spouses of veterans
Cadets at the U.S. Military, Air Force or Coast Guard Academy
Midshipmen at the U.S. Naval Academy
Officers at the National Oceanic & Atmospheric Administration.
A minimum term of service is typically required.
Minimum service required for a VA mortgage
VA home loans are available to active-duty service members, veterans (unless dishonorably discharged), and in some cases, surviving family members.
To be eligible, you need to meet one of these service requirements:
You’ve served 181 days of active duty during peacetime
You’ve served 90 days of active duty during wartime
You’ve served six years in the Reserves or National Guard
Your spouse was killed in the line of duty and you have not remarried
Your eligibility for the VA home loan program never expires.
Veterans who earned their VA entitlement long ago are still using their benefit to buy homes.
The VA loan Certificate of Eligibility (COE)
What is a COE?
In order to show a mortgage company you are VA-eligible, you’ll need a Certificate of Eligibility (COE). Your lender can acquire one for you online, usually in a matter of seconds.
Verify your VA home loan eligibility. Start here
How to get your COE (Certificate of Eligibility)
Getting a Certificate of Eligibility (COE) is very easy in most cases. Simply have your lender order the COE through the VA’s automated system. Any VA-approved lender can do this.
Alternatively, you can order your certificate yourself through the VA benefits portal.
If the online system is unable to issue your COE, you’ll need to provide your DD-214 form to your lender or the VA.
Does a COE mean you are guaranteed a VA loan?
No, having a Certificate of Eligibility (COE) doesn’t guarantee a VA loan approval.
Your COE shows the lender you’re eligible for a VA loan, but no one is guaranteed VA loan approval.
You must still qualify for the loan based on VA mortgage guidelines. The guarantee part of the VA loan refers to the VA’s promise to the lender of repayment if the borrower defaults.
Qualifying for a VA mortgage
VA loan eligibility vs. qualification
Being eligible for VA home loan benefits based on your military status or affiliation doesn’t necessarily mean you’ll qualify for a VA loan.
You still have to qualify for a VA mortgage based on your credit, debt, and income.
Verify your VA loan eligibility. Start here
Minimum credit score for a VA loan
The VA has established no minimum credit score for a VA mortgage.
However, many VA mortgage lenders require minimum FICO scores of 620 or higher — so apply with many lenders if your credit score might be an issue.
Even VA lenders that allow lower credit scores don’t accept subprime credit.
VA underwriting guidelines state that applicants must have paid their obligations on time for at least the most recent 12 months to be considered satisfactory credit risks.
In addition, the VA usually requires a two-year waiting period following a Chapter 7 bankruptcy or foreclosure before it will insure a loan.
Borrowers in Chapter 13 must have made at least 12 on-time payments and secure the approval of the bankruptcy court.
Verify your VA loan home buying eligibility. Start here
VA loan debt-to-income ratios
The relationship of your debts and your income is called your debt-to-income ratio, or DTI.
VA underwriters divide your monthly debts (car payments, credit cards, and other accounts, plus your proposed housing expense) by your gross (before-tax) income to come up with your debt-to-income ratio.
For instance:
If your gross income is $4,000 per month
And your total monthly debt is $1,500 (including the new mortgage, property taxes and homeowners insurance, plus other debt payments)
Then your DTI is 37.5% (1500/4000=0.375)
A DTI over 41% means the lender has to apply additional formulas to see if you qualify under residual income guidelines.
VA residual income rules
VA underwriters perform additional calculations that can affect your mortgage approval.
Factoring in your estimated monthly utilities, your estimated taxes on income, and the area of the country in which you live, the VA arrives at a figure which represents your “true” costs of living.
It then subtracts that figure from your income to find your residual income (e.g. your money “left over” each month).
Think of the residual income calculation as a real-world simulation of your living expenses.
It is the VA’s best effort to ensure that military families have a stress-free homeownership experience.
Here is an example of how residual income works, assuming a family of four which is purchasing a 2,000 square-foot home on a $5,000 monthly income.
Future house payment, plus other debt payments: $2,500
Monthly estimated income taxes: $1,000
Monthly estimated utilities at $0.14 per square foot: $280
This leaves a residual income calculation of $1,220.
Now, compare that residual income to for a family of four:
Northeast Region: $1,025
Midwest Region: $1,003
South Region: $1,003
West Region: $1,117
The borrower in our example exceeds VA’s residual income standards in all parts of the country.
Therefore, despite the borrower’s debt-to-income ratio of 50%, the borrower could get approved for a VA loan.
Verify your VA loan eligibility. Start here
Qualifying for a VA loan with part-time income
You can qualify for this type of financing even if you have a part-time job or multiple jobs.
You must show a 2-year history of making consistent part-time income, and stability in the number of hours worked. The lender will make sure any income received appears stable. See our complete guide to getting a mortgage when you’re self-employed or work part-time.
VA funding fees and loan limits
About the VA funding fee
The VA charges an upfront fee to defray the costs of the program and make it sustainable for the future.
Veterans pay a lump sum that varies depending on the loan purpose and down payment amount.
The fee is normally wrapped into the loan. It does not add to the cash needed to close the loan.
Find out if you qualify for a VA loan. Start here
VA home purchase funding fees
Type of Military Service
Down Payment
Fee for First-Time Use
Fee for Subsequent Use
Active Duty, Reserves, and National Guard
None
2.3%
3.6%
5% or more
1.65%
1.65%
10% or more
1.4%
1.4%
VA cash-out refinance funding fees
Type of Military Service
Fee for First-Time Use
Fee for Subsequent Uses
Active Duty, Reserves, and National Guard
2.3%
3.6%
VA streamline refinances (IRRRL) & assumptions
Type of Military Service
Fee for First-Time Use
Fee for Subsequent Uses
Active Duty, Reserves, and National Guard
0.5%
0.5%
Manufactured home loans not permanently affixed
Type of Military Service
Fee for First-Time Use
Fee for Subsequent Uses
Active Duty, Reserves, and National Guard
1.0%
1.0%
VA loan limits in 2024
VA loan limits have been repealed, thanks to the Blue Water Navy Vietnam Veterans Act of 2019.
There is no maximum amount for which a home buyer can receive a VA loan, at least as far as the VA is concerned.
However, private lenders may set their own limits. So check with your lender if you are looking for a VA loan above local conforming loan limits.
Verify your VA loan eligibility. Start here
Eligible property types
Houses you can buy with a VA loan
VA mortgages are flexible about what types of property you can and can’t purchase. A VA loan can be used to buy a:
Detached house
Condo
New-built home
Manufactured home
Duplex, triplex or four-unit property
Find out if you qualify for a VA loan. Start here
You can also use a VA mortgage to refinance an existing loan for any of those types of properties.
VA loans and second homes
Federal regulations limit loans guaranteed by the Department of Veterans Affairs to “primary residences” only.
However, “primary residence” is defined as the home in which you live “most of the year.”
Therefore, if you own an out-of-state residence in which you live for more than six months of the year, this other home, whether it’s your vacation home or retirement property, becomes your official “primary residence.”
For this reason, VA loans are popular among aging military borrowers.
Buying a multi-unit home with a VA loan
VA loans allow you to buy a duplex, triplex, or four-plex with 100% financing. You must live in one of the units.
Buying a home with more than one unit can be challenging.
Mortgage lenders consider these properties riskier to finance than traditional, single-family residences, so you’ll need to be a stronger borrower.
VA underwriters must make sure you will have enough emergency savings, or cash reserves, after closing on your house. That’s to ensure you’ll have money to pay your mortgage even if a tenant fails to pay rent or moves out.
The minimum cash reserves needed after closing is six months of mortgage payments (covering principal, interest, taxes, and insurance – PITI).
Your lender will also want to know about previous landlord experience you’ve had, or any experience with property maintenance or renting.
If you don’t have any, you may be able to sidestep that issue by hiring a property management company. But that’s up to the individual lender.
Your lender will look at the income (or potential income) of the rental units, using either existing rental agreements or an appraiser’s opinion of what the units should fetch.
They’ll usually take 75% of that amount to offset your mortgage payment when calculating your monthly expenses.
VA loans and rental properties
You cannot use a VA loan to buy a rental property. You can, however, use a VA loan to refinance an existing rental home you once occupied as a primary home.
For home purchases, in order to obtain a VA loan, you must certify that you intend to occupy the home as your principal residence.
If the property is a duplex, triplex, or four-unit apartment building, you must occupy one of the units yourself. Then you can rent out the other units.
The exception to this rule is the VA’s Interest Rate Reduction Refinance Loan (IRRRL).
This loan, also known as the VA Streamline Refinance, can be used for refinancing an existing VA loan on a home where you currently live or where you used to live, but no longer do.
Check your VA IRRRL eligibility. Start here
Buying a condo with a VA loan
The VA maintains a list of approved condo projects within which you may purchase a unit with a VA loan.
At VA’s website, you can search for the thousands of approved condominium complexes across the U.S.
If you are VA-eligible and in the market for a condo, make sure the unit you’re interested in is approved.
As a buyer, you are probably not able to get the complex VA-approved. That’s up to the management company or homeowner’s association.
If a condo you like is not approved, you must use other financing like an FHA or conventional loan or find another property.
Note that the condo must meet FHA or conventional guidelines if you want to use those types of financing.
Veteran mortgage relief with the VA loan
The U.S. Department of Veterans Affairs, or VA, provides home retention assistance. The VA intervenes when a veteran is having trouble making home loan payments.
The VA works with loan servicers to offer loan options to the veteran, other than foreclosure.
Find out if you qualify for a VA loan. Start here
In fiscal year 2019, the VA made over 400,000 contact actions to reach borrowers and loan servicers. The intent was to work out a mutually agreeable repayment option for both parties.
More than 100,000 veteran homeowners avoided foreclosure in 2019 alone thanks to this effort.
The initiative has saved the taxpayer an estimated $2.6 billion. More importantly, vast numbers of veterans and military families got another chance at homeownership.
When NOT to use a VA loan
If you have good credit and 20% down
A primary advantage to VA home loans is the lack of mortgage insurance.
However, the VA guarantee does not come free of charge. Borrowers pay an upfront funding fee, which they usually choose to add to their loan amount.
The fee ranges from 1.4% to 3.6%, depending on the down payment percentage and whether the home buyer has previously used his or her VA mortgage eligibility. The most common fee is 2.3%.
Find out if you qualify for a VA loan. Start here
On a $200,000 purchase, a 2.3% fee equals $4,600.
However, buyers who choose a conventional mortgage and put 20% down get to avoid mortgage insurance and the upfront fee. For these military home buyers, the VA funding fee might be an unnecessary expense.
The exception: Mortgage applicants whose credit rating or income meets VA guidelines but not those of conventional mortgages may still opt for VA.
If you’re on the “CAIVRS” list
To qualify for a VA loan, you must prove you have made good on previous government-backed debts and that you have paid taxes.
The Credit Alert Verification Reporting System, or “CAIVRS,” is a database of consumers who have defaulted on government obligations. These individuals are not eligible for the VA home loan program.
If you have a non-veteran co-borrower
Veterans often apply to buy a home with a non-veteran who is not their spouse.
This is okay. However, it might not be their best choice.
As the veteran, your income must cover your half of the loan payment. The non-veteran’s income cannot be used to compensate for the veteran’s insufficient income.
Plus, when a non-veteran owns half the loan, the VA guarantees only half that amount. The lender will require a 12.5% down payment for the non-guaranteed portion.
The Conventional 97 mortgage, on the other hand, allows down payments as low as 3%.
Another low-down-payment mortgage option is the FHA home loan, for which 3.5% down is acceptable.
The USDA home loan also requires zero down payment and offers similar rates to VA loans. However, the property must be within USDA-eligible areas.
If you plan to borrow with a non-veteran, one of these loan types might be your better choice.
Explore your mortgage options. Start here
If you apply with a credit-challenged spouse
In states with community property laws, VA lenders must consider the credit rating and financial obligations of your spouse. This rule applies even if he or she will not be on the home’s title or even on the mortgage.
Such states are as follows.
Arizona
California
Idaho
Louisiana
Nevada
New Mexico
Texas
Washington
Wisconsin
A spouse with less-than-perfect credit or who owes alimony, child support, or other maintenance can make your VA approval more challenging.
Apply for a conventional loan if you qualify for the mortgage by yourself. The spouse’s financial history and status need not be considered if he or she is not on the loan application.
Verify your VA loan home buying eligibility. Start here
If you want to buy a vacation home or investment property
The purpose of VA financing is to help veterans and active-duty service members buy and live in their own home. This loan is not meant to build real estate portfolios.
These loans are for primary residences only, so if you want a ski cabin or rental, you’ll have to get a conventional loan.
If you want to purchase a high-end home
Starting January 2020, there are no limits to the size of mortgage a lender can approve.
However, lenders may establish their own limits for VA loans, so check with your lender before applying for a large VA loan.
Spouses and the VA mortgage program
What spouses are eligible for a VA loan?
What if the service member passes away before he or she uses the benefit? Eligibility passes to an unremarried spouse, in many cases.
Find and lock a low VA loan rate today. Start here
For the surviving spouse to be eligible, the deceased service member must have:
Died in the line of duty
Passed away as a result of a service-connected disability
Been missing in action, or a prisoner of war, for at least 90 days
Been a totally disabled veteran for at least 10 years prior to death, and died from any cause
Also eligible are remarried spouses who married after the age of 57, on or after December 16, 2003.
In these cases, the surviving spouse can use VA loan eligibility to buy a home with zero down payment, just as the veteran would have.
VA loan benefits for surviving spouses
Surviving spouses have an additional VA loan benefit, however. They are exempt from the VA funding fee. As a result, their loan balance and monthly payment will be lower.
Surviving spouses are also eligible for a VA streamline refinance when they meet the following guidelines.
The surviving spouse was married to the veteran at the time of death
The surviving spouse was on the original VA loan
VA streamline refinancing is typically not available when the deceased veteran was the only applicant on the original VA loan, even if he or she got married after buying the home.
In this case, the surviving spouse would need to qualify for a non-VA refinance, or a VA cash-out loan.
A cash-out mortgage through VA requires the military spouse to meet home purchase eligibility requirements.
If this is the case, the surviving spouse can tap into the home’s equity to raise cash for any purpose, or even pay off an FHA or conventional loan to eliminate mortgage insurance.
Qualifying if you receive (or pay) child support or alimony
Buying a home after a divorce is no easy task.
If, prior to your divorce, you lived in a two-income household, you now have less spending power and a reduced monthly income for purposes of your VA home loan application.
With less income, it can be harder to meet both the VA Home Loan Guaranty’s debt-to-income (DTI) guidelines and the VA residual income requirement for your area.
Receiving alimony or child support can counteract a loss of income.
Mortgage lenders will not require you to provide information about your divorce agreement’s alimony or child support terms, but if you’re willing to disclose, it can count toward qualifying for a home loan.
Different VA-approved lenders will treat alimony and child support income differently.
Typically, you will be asked to provide a copy of your divorce settlement or other court paperwork to support the alimony and child support payments.
Lenders will then want to see that the payments are stable, reliable, and likely to continue for another 36 months, at least.
You may also be asked to show proof that alimony and child support payments have been made in the past reliably, so that the lender may use the income as part of your VA loan application.
If you are the payor of alimony and child support payments, your debt-to-income ratio can be harmed.
Not only might you be losing the second income of your dual-income households, but you’re making additional payments that count against your outflows.
VA mortgage lenders make careful calculations with respect to such payments.
You can still get approved for a VA loan while making such payments — it’s just more difficult to show sufficient monthly income.
VA loan assumption
What is VA loan assumption?
One benefit for home buyers is that VA loans are assumable. When you assume a mortgage loan, you take over the current homeowner’s monthly payment.
Verify your VA loan home buying eligibility. Start here
That could be a big advantage if mortgage rates have risen since the original owner purchased the home. The buyer would be able to acquire a low-rate, affordable loan — and it could make it easier for the seller to find a willing buyer in a tough market.
VA loan assumption savings
Buying a home via an assumable mortgage loan is even more appealing when interest rates are on the rise.
For example:
Say a seller-financed $200,000 for their home in 2013 at an interest rate of 3.25% on a 30-year fixed loan
Using this scenario, their principal and interest payment would be $898 per month
Let’s assume current 30-year fixed rates averaged 4.10%
If you financed $200,000 at 4.10% for a 30-year loan term, your monthly principal and interest payment would be $966 per month
Additionally, because the seller has already paid four years into the loan term, they’ve already paid nearly $25,000 in interest on the loan.
By assuming the loan, you would save $34,560 over the 30-year loan due to the difference in interest rates. You would also save roughly $25,000 thanks to the interest already paid by the sellers.
That comes out to a total savings of almost $60,000!
How to assume (take on) a VA loan
There are currently two ways to assume a VA loan.
The new buyer is a qualified veteran who “substitutes” his or her VA eligibility for the eligibility of the seller
The new home buyer qualifies through VA standards for the mortgage payment. This is the safest method for the seller as it allows the loan to be assumed knowing that the new buyer is responsible for the loan, and the seller is no longer responsible for the loan
The lender and/or the VA needs to approve a loan assumption.
Loans serviced by a lender with automatic authority may process assumptions without sending them to a VA Regional Loan Center.
For lenders without automatic authority, the loan must be sent to the appropriate VA Regional Loan Center for approval. This loan process will typically take several weeks.
When VA loans are assumed, it’s the servicer’s responsibility to make sure the homeowner who assumes the property meets both VA and lender requirements.
VA loan assumption requirements
For a VA mortgage assumption to take place, the following conditions must be met:
The existing loan must be current. If not, any past due amounts must be paid at or before closing
The buyer must qualify based on VA credit and income standards
The buyer must assume all mortgage obligations, including repayment to the VA if the loan goes into default
The original owner or new owner must pay a funding fee of 0.5% of the existing principal loan balance
A processing fee must be paid in advance, including a reasonable estimate for the cost of the credit report
Find out if you qualify for a VA loan. Start here
Finding assumable VA loans
There are several ways for home buyers to find an assumable VA loan.
Believe it or not, print media is still alive and well. Some home sellers advertise their assumable home for sale in the newspaper, or in a local real estate publication.
There are a number of online resources for finding assumable mortgage loans.
Websites like TakeList.com and Zumption.com give homeowners a way to showcase their properties to home buyers looking to assume a loan.
With the help of the Multiple Listing Service (MLS), real estate agents remain a great resource for home buyers.
This applies to home buyers specifically searching for assumable VA loans as well.
How do I apply for a VA loan?
You can easily and quickly have a lender pull your certificate of eligibility (COE) to make sure you’re able to get a VA loan.
Most mortgage lenders offer VA home loans. So you’re free to shop and compare rates with just about any company that catches your eye.
Getting a VA loan for your new home is similar in many ways to securing any other purchase loan. Once you find an ideal home in your price range, you make a purchase offer, and then undergo VA appraisal and underwriting.
VA appraisal ensures that the home meets its minimum property requirements (MPRs) and is structurally sound and safe for occupancy.
What’s more, VA-specific mortgage lenders are actually some of the highest-rated (and lowest-priced) on the market. Here are a few we’d recommend checking out.
Time to make a move? Let us find the right mortgage for you
A plan by the Department of Veterans Affairs to introduce a low-interest refinancing option for veterans with VA-backed loans facing foreclosure drew ire from a House lawmaker who complained some homeowners might choose to default for lower monthly payments. (Stars and Stripes)
WASHINGTON — A plan by the Department of Veterans Affairs to introduce a low-interest refinancing option for veterans with VA-backed loans facing foreclosure drew ire of a House lawmaker who complained some homeowners might choose to default for lower monthly payments.
Rep. Merrick Van Orden, R-Wis., chairman of the House Committee on Veterans’ Affairs subpanel on economic opportunity, on Thursday questioned whether the new VA Servicing Purchase program — also known as VASP — will cause some homeowners to forgo paying back home loans to qualify for VA refinancing at the lower rate of 2.5% offered by the program.
The average interest rate now for a 30-year fixed mortgage is 7.24%, according to Bankrate, a consumer financial services company that surveys major lenders weekly.
“It is essential that we support the dream of home ownership for veterans who served our country,” said Van Orden, a Navy veteran who used a traditional VA home loan to buy his house. “I have used this program myself, and it is awesome.”
But he also said he has “grave reservations” that the new VASP program would result in unintended consequences that could destroy the VA home loan program.
The refinancing option is expected to be rolled out in spring, according to the VA.
Under the program, the VA would purchase the loan from the servicer to hold it in its own portfolio. Qualifying veterans would be allowed to refinance their mortgages under the VASP rate of 2.5% after falling behind on at least two mortgage payments.
“I am concerned that this program poses a moral hazard and will encourage veterans to become delinquent on their loans to let VA take over the servicing of their payments,” Van Orden said at a House hearing about the home loan program.
He said if the VA then experienced high delinquency rates under the VASP program, it could end up being responsible for thousands of home loans it serviced.
Van Orden questioned whether the VA should be in the business of servicing loans and expressed concern that the VA would force veterans out of their homes if they failed to pay down their mortgages.
Given that veterans are 50% more likely to be homeless than others, Van Orden said he could not imagine “the VA would go so far as to be kicking people out of their homes — default or no default.”
Under those circumstances, Van Orden speculated the federal government would end up owning mortgage-delinquent properties and letting the veterans stay in their homes.
“It is no longer private property. It is public property with private citizens living in public property. That was tried in the Soviet Union. I am not signing up for that,” he said.
Van Orden said the House subcommittee has received little information on how the VASP program will operate, its costs and its overall effect on the mortgage markets.
“All of this is a cause for concern,” he said. “We need answers on VASP.”
The VA announced the VASP program in November 2023 in the Federal Register that stated “VA is initiating an expanded program using existing refund provisions. Under this program, VA will exercise its statutory option to purchase the loan from the servicer and VA will hold the loan in VA’s own loan portfolio.”
VA-guaranteed loans comprise more than 10% of the mortgage market, according to the VA.
The VA worked to assist thousands of veterans during the coronavirus pandemic who fell behind on mortgage payments, said Rep. Mike Levin of California, the top Democrat on the subcommittee. He said many financial relief measures implemented during the pandemic have ended.
Levin said the VA in December 2023 paused foreclosures on VA home loans through May 31. The measure allows veterans who have defaulted on their loans to stay in their homes.
Under the foreclosure pause, the VA extended its coronavirus refund modification program that allowed the VA to purchase past due payments — along with additional principal amounts as necessary — and give veterans a second mortgage with no interest.
Lenders meanwhile are encouraged by the VA to work with delinquent homeowners to modify payments with plans that are more affordable. Last year, the VA helped more than 145,000 veterans and their families stay in their homes through various programs, the agency said.
“I understand that the VA cannot prevent every foreclosure. But I expect it to exhaust every option,” Levin said, in reference to VASP and other VA assistance programs.
VASP would provide refinancing at an interest rate lower than the current market rate, which would continue over the life span of the loan, said John Bell, executive director of the VA Home Loan Guaranty Program.
The VA estimates under a VASP Program loan — with a 2.5% fixed interest rate for 30 or 40 years — there would be an average payment reduction of 20%, in principal and interest, for homeowners.
“It is so important that we get this right,” said Levin, who urged the VA to let Congress know what additional tools it might need to assist borrowers in default and ensure that foreclosures occur only “in the most extreme circumstances.”
Bell said job loss, divorce and catastrophic illness can impact financial stability for homeowners.
The VA home loan program — established in 1944 during World War II for soldiers returning home — helps veterans, active-duty personnel, members of the reserves and National Guard, as well as their family members, buy homes, refinance loans and pay for home improvements.
VA has guaranteed more than 28 million loans, valued at nearly $4 trillion, since the program’s inception, Bell said.
One of the attractions of the VA home loan program is the offer of 100% financing without requiring a down payment. A veteran purchasing a home at $386,000 — the median rate now — could avoid a traditional 20% down payment of $77,000, he said.
In fiscal 2023, the VA received 860,000 calls from veterans seeking information and assistance with their home loans. He said 65,000 borrowers are at least 90 days late on their VA home loans.
Bell doubted homeowners would default on home loan payments, damage their credit and face foreclosure to secure a 2.5% interest rate through the VASP program.
“The VASP program is simply a more sustainable option for veterans who cannot afford other available loss mitigation options, such as repayment plans, special forbearances and traditional loan modifications,” he said.
But Van Orden disagreed.
“My focus is to ensure that veterans remain in their homes whenever possible,” he said. “But I am concerned that this program could evolve into a financial burden of billions of dollars in bailouts that fall on the shoulders of taxpayers.
In a standard home purchase scenario, prospective homebuyers apply with a lender to obtain conventional financing to get the new home on their wishlist.
Did you know, however, that there may be another financing option that could possibly benefit both the buyer and the seller under the right circumstances? We’re talking about the Assumable Mortgage.
What Is an Assumable Mortgage?
An assumable mortgage is a special type of home financing that allows a homebuyer to take over (or, assume) the seller’s existing mortgage and all of the terms that come with it, such as the interest rate, current balance, and repayment period. In cases where interest rates have gone up significantly since the seller originally bought and financed the home, this can present a savings opportunity that includes the low interest rate on the mortgage as part of the purchase of the home.
Which Types of Mortgages Are Assumable?
The loans that most often qualify for assumption are VA and FHA loans, which are backed by the federal government. Under certain circumstances conventional mortgages can also be assumable, but the majority of those loans contain a due-on-sale clause requiring the full balance of the loan to be paid upon transfer of property ownership, which makes the loan ineligible for assumption.
How Do Assumable Mortgages Work?
If you’re selling your home and the mortgage on the home is eligible for assumption, you can allow a qualified interested buyer to take over your mortgage as part of the sale of your home.
With the approval of your lender, the buyer would take over all of the responsibilities of your existing mortgage along with the home itself — including the interest rate and monthly payment — which can be significantly lower than the current rates and terms available for new mortgages. All of the terms of the loan would stay as is and simply be transferred over in the buyer’s name. You’ll want to be sure to get a written release of liability signed by both you (the original loan holder) and the lender to remove yourself from any further responsibility on the loan.
In the right circumstances, your buyer could save tens of thousands of dollars on an assumed mortgage since they’re effectively grandfathered in on what could be more favorable terms secured when the original loan was obtained. Given this unique benefit, you could potentially leverage that savings to justify a higher asking price for your home.
To illustrate the savings and benefits of this unique transaction, let’s explore an example scenario below from the buyer’s perspective.
Saving Money With an Assumable Mortgage
Let’s say you’re buying a home and you’d like to assume the mortgage on the home, appraised at $230,769 with a current remaining principal loan balance of $203,249. This means you would take over the payments on the remaining $203,249 and enjoy the original terms allotted to the assumed mortgage.
That still leaves $27,520 that must be paid in cash to the seller, which you can settle during the loan assumption transaction, much like a traditional down payment. If you cannot produce that entire cash amount to assume the loan, you may possibly be able to secure an additional personal loan to cover a portion of the difference. Keep in mind, however, that in most cases lenders who provide secondary financing will typically want to make sure that no more than 85 to 90 percent of the total appraised value of the home is being financed.
Here is an example comparison of a standard new FHA mortgage on a home selling for $230,769, versus an assumed FHA mortgage on the same home, with a lower fixed interest rate and five years already paid on the term.
New FHA Mortgage: A new 30-year FHA loan for a home priced and appraised at $230,769, with a principal loan balance of $222,692 (after the buyer put a minimum of 3.5% down, or approximately $8,077) with a fixed interest rate of 6.25%, will result in monthly payments of $1,371.15 (principal and interest only, excluding property taxes and insurance) totaling $493,615.06 over the life of the mortgage.
Assumable Mortgage: The assumption of a 30-year FHA loan with 25 years left on the term for a home selling for $230,769 with a remaining principal balance of $203,249 at the original interest rate of 2.5% results in a monthly payment of $911.81 and an approximate total loan cost of $273,543.07 (paid over 25 years).
New 30-Year FHA Mortgage
Assumable FHA Mortgage
Savings
Principal Loan Balance
$222,692
$203,249
N/A
Interest Rate
6.25%
2.5%
N/A
Down Payment
$8,077
$27,520
N/A
Monthly Payment(s)
$1,371.15
$911.81
$459.34
Total Loan Cost (principal +interest)
$493,615.06
$273,543.07
$220,071.99
Note: The example above does not include mortgage insurance. Mortgage Insurance (MI) may change depending on the LTV. Ask your loan officer for more information.
As illustrated above, if you are able to assume an eligible loan with an interest rate significantly lower than what is available on the market and have the ability to put down the additional cash to cover the equity owned by the seller (or obtain secondary financing), your savings could be substantial.
In the example scenario, your monthly mortgage payments for the 25 years remaining on the assumed loan would be $911.81. Compared to a new FHA loan with a higher market rate, this would result in a monthly savings of $459.34 and $220,071.99 saved over the entire life of your mortgage.
It is also worth noting that the less equity a seller has in their home, the more attractive an assumable mortgage may be to a buyer. For example, if that same assumable loan had an unpaid principal balance of $215,000, you’d only be responsible for a $15,769 difference instead of $27,520.
FHA Assumable Mortgage Requirements
Federal Housing Authority (FHA) loans qualify for assumption because they are free from the restrictions of due-on-sale clauses that are common in conventional mortgages.
Buyers wishing to assume an FHA mortgage must have a minimum credit score of 620, although buyers with scores above 580 may be eligible with additional restrictions. Similar to a conventional loan, your debt-to-income ratio including the assumed loan’s payment, cannot exceed 43% (although in special circumstances it can go as high as 50%).
VA Assumable Mortgage Requirements
The United States Department of Veterans Affairs (VA) has long offered one of the best home loan programs available for qualifying veterans, active military and their dependents.
A few important facts about VA loan assumptions:
As long as the buyer is VA-eligible, the seller’s VA entitlement remains intact.
If a buyer who is not VA-eligible assumes a VA loan, the seller loses their VA entitlement, as it will be tied to that original loan.
Buyers must meet all VA standards for creditworthiness and income, and the assumption must be approved by both the VA and the lender.
All mortgage obligations are assumed by the buyer, up to and including the obligation to repay the VA should the buyer default on the loan.
A “VA funding fee” equal to 0.5% of the current loan balance (only the principal amount) will be charged.
Want to know more about VA mortgages and whether you or a family member qualifies? Discover the special rates and benefits of VA home loans.
All mortgage payments must be current at the time of closing. You should plan to provide funds necessary to clear any outstanding payments before you can assume the loan. Either the buyer or seller can bring the loan to good standing.
Special Circumstances for Assuming a Mortgage
There are several special circumstances in which a buyer or inheritor must assume a mortgage in order to take possession of a home.
May I Assume the Mortgage of an Inherited Home?
Yes. In the unfortunate circumstance of a loved one passing, assuming the mortgage of the home that’s been willed to you would be useful if you wish to keep it in the family or live in it.
Federal law requires lenders to allow heirs to assume the mortgage of an inherited home, regardless of any due-on-sale clause included on the loan. It’s best to seek the advice of an estate attorney to ensure all bases are covered under these circumstances. As you figure out your options, be sure to continue making the regular monthly payments on the mortgage to prevent foreclosure of the property.
Assuming the Mortgage in Case of a Divorce
In the event of a divorce, one party or the other may have been awarded the family home.
If you’re the one keeping the home with a mortgage, you’ll need to qualify with the lender to assume the mortgage under your individual income and credit score, or by showing six months of timely payments you’ve made on your own without the help of your spouse.
Once the awarded party assumes the mortgage, the person who will no longer reside in the home should be released from all liability with the proper signed paperwork, as required by the lender.
May I Assume the Mortgage of a Home in Foreclosure?
Yes. Facing foreclosure is difficult, and a homeowner may want to do anything to prevent it. Allowing another party to assume the mortgage may be a good option.
In this type of purchase scenario, the buyer will need to pay off the entire past due amount before the assumption can occur. Buyers may accomplish this with cash or through a separate loan.
If it’s a Fannie Mae loan in question, Fannie Mae will review the prospective borrower’s financial packet to determine if they can afford the payments on the mortgage. Each investor or insurer will have specific requirements around what is required to complete the assumption.
If you’re set on the property as your ideal home, the default amount isn’t unreasonable, and the interest rate you’re assuming is favorable, then it can be worth the extra cost and effort to secure the loan.
From Applying to Signing on the Dotted Line: Important Facts
If you apply to assume a mortgage, expect to provide all the standard financial information normally required from a lender for a home loan application. This can include pay stubs, bank statements, W2s, and any other means to prove your ability to take over the mortgage.
While many may appreciate that an appraisal isn’t typically required, it might be beneficial to request one. That way you can ensure that the asking price for the home is fair in the current market.
Make sure a title check is performed as well to clear up any possibility of outstanding liens or encumbrances on the property before signing on the dotted line.
While closing costs can be lower with an assumed mortgage, an assumption fee may be charged.
FHA assumption closing costs are typically between 2 and 6 percent of the sale price of the home.
The VA charges a funding fee of 0.5% of the principal loan balance.
If you’re assuming the loan of an inherited property, it may be within your rights to avoid an assumption fee. Be sure to consult with an estate attorney if questions arise.
If you end up borrowing from more than one lender to complete the mortgage assumption, be sure that each lender is informed of all loan activity for the home. Each lender may require slightly different information, so prepare ahead of time for varying requests during the financial evaluation process.
Key Takeaways For Assumable Mortgages
Under the right circumstances, an assumable mortgage can mean thousands in savings for a qualified buyer.
A seller can leverage those savings to attract buyers and increase the asking price for the home.
The lender is the party with the final say over whether a buyer can assume a seller’s current mortgage.
The amount of equity in the home owned by the seller can be a key factor in whether assuming a loan is the right route for a buyer to take.
VA-eligible home sellers should take extra precaution when considering an assumption to protect their VA entitlement.
Is a Mortgage Assumption the Right Move?
The advantages for both sellers and buyers in this type of transaction is clear, as long as the interest rate on the mortgage is lower than what is available on the current market, the equity owned by the seller isn’t too great, and the lender approves of the assumption along with a release of liability to the original borrower on the loan.
If you’re selling your home that you have an FHA or VA mortgage for and the interest rate is lower than what the current market offers, you may want to connect your prospective buyers with your lender to see if an assumption is possible.
Questions about your existing mortgage or looking to buy a home soon? We’re here for you. Connect with a Pennymac Loan Expert to explore your home loan options or get started on a BuyerReady Certification today.
The mean rate for a 15-year fixed-rate refinance moved higher this week, while 30-year fixed refinance rates trailed off. The average rate on 10-year fixed refinance increased.
30-year fixed refinance: 7.18%
15-year fixed refinance: 6.58%
10-year fixed refinance: 6.47%
Refinance rates saw some turmoil over the last week, but they’ve been slowly dropping from their peaks in 2023. Experts say slowing inflation and the Federal Reserve’s projected interest rate cuts should help push mortgage interest rates down to around 6% by the end of 2024.
Over 82% of homeowners currently have interest rates below 5% on their property. If home loan rates stabilize over the next several months, more homeowners should be able to save money through refinancing. But in order for refinance applications to pick up in a meaningful way, rates would need to fall substantially, according to Mark Zandi, chief economist at Moody’s Analytics.
Mortgage refinance rates change every day. Experts recommend shopping around to make sure you’re getting the lowest rate. By entering your information below, you can get a custom quote from one of CNET’s partner lenders.
About these rates: Like CNET, Bankrate is owned by Red Ventures. This tool features partner rates from lenders that you can use when comparing multiple mortgage rates.
Refinance rates for homeowners
Refinance rates are currently between 6% and 7%, but your personal interest rate will depend on your credit history, financial profile and application.
Here are the average refinance rates provided by lenders across the US. We track refinance rate trends using information collected by Bankrate:
Average refinance interest rates
Product
Rate
A week ago
Change
30-year fixed refi
7.18%
7.21%
-0.03
15-year fixed refi
6.58%
6.52%
+0.06
10-year fixed refi
6.47%
6.38%
+0.09
Rates as of Feb. 13, 2024
What to know about 2024 refinance rate trends
When mortgage rates hit historic lows during the pandemic, millions of homeowners were able to refinance to lower interest rates. While experts don’t anticipate another refinancing boom, it’s a positive sign that rates are now tending to move downward or sideways instead of soaring up.
For homeowners looking to refinance, remember that you can’t time the market: Interest rates fluctuate on an hourly, daily and weekly basis, and are influenced by an array of macroeconomic factors. Your best move is to keep an eye on day-to-day rate changes and have a game plan on how to capitalize on a big enough percentage drop, said Matt Graham of Mortgage News Daily.
Refinancing 101
When you refinance your mortgage, you take out another home loan that pays off your initial mortgage. With a traditional refinance, your new home loan will have a different term and/or interest rate. With a cash-out refinance, you’ll tap into your equity with a new loan that’s bigger than your existing mortgage balance, allowing you to pocket the difference in cash.
Refinancing can be a great financial move if you score a low rate or can pay off your home loan in less time, but consider whether it’s the right choice for you. Reducing your interest rate by 1% or more is an incentive to refinance, allowing you to cut your monthly payment significantly.
Refinancing in today’s market could make sense if you have a rate above 8%, said Logan Mohtashami, lead analyst at HousingWire. “However, with all refinancing options, it’s a personal financial choice because of the cost that goes with the loan process,” Mohtashami said.
Reasons you might refinance your home
Homeowners usually refinance to save money, but there are other reasons to do so. Here are the most common reasons homeowners refinance:
To get a lower interest rate: If you can secure a rate that’s at least 1% lower than the one on your current mortgage, it could make sense to refinance.
To switch the type of mortgage: If you have an adjustable-rate mortgage and want greater security, you could refinance to a fixed-rate mortgage.
To eliminate mortgage insurance: If you have an FHA loan that requires mortgage insurance, you can refinance to a conventional loan once you have 20% equity.
To change the length of a loan term: Refinancing to a longer loan term could lower your monthly payment. Refinancing to a shorter term will save you interest in the long run.
To tap into your equity through a cash-out refinance: If you replace your mortgage with a larger loan, you can receive the difference in cash to cover a large expense.
To take someone off the mortgage: In case of divorce, you can apply for a new home loan in just your name and use the funds to pay off your existing mortgage.
How to shop for refinance rates
The rates advertised online often require specific conditions for eligibility. Your personal interest rate will be influenced by market conditions as well as your specific credit history, financial profile and application. Having a high credit score, a low credit utilization ratio and a history of consistent and on-time payments will generally help you get the best interest rates.
30-year fixed-rate refinance
The average rate for a 30-year fixed refinance loan is currently 7.18%, a decrease of 3 basis points compared to one week ago. (A basis point is equivalent to 0.01%.) A 30-year fixed refinance will typically have lower monthly payments than a 15-year or 10-year refinance, but it will take you longer to pay off and typically cost you more in interest over the long term.
15-year fixed-rate refinance
The average 15-year fixed refinance rate right now is 6.58%, an increase of 6 basis points from what we saw the previous week. Though a 15-year fixed refinance will most likely raise your monthly payment compared to a 30-year loan, you’ll save more money over time because you’re paying off your loan quicker. Also, 15-year refinance rates are typically lower than 30-year refinance rates, which will help you save more in the long run.
10-year fixed-rate refinance
For 10-year fixed refinances, the average rate is currently at 6.47%, an increase of 9 basis points from what we saw the previous week. A 10-year refinance typically has the lowest interest rate but the highest monthly payment of all refinance terms. A 10-year refinance can help you pay off your house much quicker and save on interest, but make sure you can afford the steeper monthly payment.
To get the best refinance rates, make your application as strong as possible by getting your finances in order, using credit responsibly and monitoring your credit regularly. And don’t forget to speak with multiple lenders and shop around.
Most people have spent their entire lives living with other people, whether it’s their parents or a roommate. And while it’s great to have company in your home, sometimes the thought of having your own space sounds liberating. You can come and go as you please, you don’t have to worry about another person’s life, you can decorate with your favorite items and colors and relax in your pajamas until noon without being criticized.
However, living alone can also have its pitfalls, including concerns about security and nervousness around feeling lonely. While it’s legitimate to have a fear of living alone, there are ways to overcome it.
Reasons you may fear living alone
All of us at one point or another feel lonely or have had the fear of being alone. However, there are many different reasons people are afraid to live alone ranging from having anxiety, being scared or worrying about loneliness. These fears are amplified if you’re a woman.
However, we’ve got good news. There are several simple steps you can take to help make your abode more secure, boost your comfort level and enjoy your freedom to its fullest. But first, let’s examine some reasons you fear living alone and some symptoms that go along with it.
Mental health conditions and anxiety disorders
Mental health and different forms of anxiety can make the idea of living alone extremely difficult. Whether it’s a specific disorder or a fear from a previous traumatic experience, it’s a good idea to do some research on symptoms of phobias and how to overcome them with treatment.
And don’t worry, you’re not alone. In recent years, studies have shown that Millenials are the loneliest generation next to Gen X and Babyboomers.
Remember, it’s always good to keep an eye on your mental health and phobias and to do so, there are several different online medical resources — such as Healthline Media — that use academic research institutions and do peer-reviewed studies to help you better understand mental disorders and specific phobias. If you live outside the U.S., there are different resources for you, such as Anxiety Care UK.
Here are a few other anxiety disorders and phobias that could lead to feelings of anxiety about living alone.
Monophobia or Autophobia
Many people experience some form of anxiety or specific phobias and one type is Monophobia, or Autophobia, which is the fear of being alone. Autophobia is currently not an official diagnosis by the Diagnostic and Statistical Manual of Mental Disorders fifth edition, which has strict sourcing guidelines. However, it’s currently a subcategory of other phobias.
Understanding autophobia is difficult as this particular phobia can manifest differently from person to person. Some people might experience the fear of being separated from a specific person, while others might experience fear of being home alone or fear the feeling of being lonely.
However, it’s important to note that this phobia is different than just feeling lonely. According to Medical News Today, “Loneliness refers to negative emotions that arise when a person feels that they have too few social interactions or meaningful connections… Having autophobia involves severe anxiety triggered by the idea of spending time alone.”
This form of anxiety can manifest with different physical symptoms. Here are some of the common symptoms of this phobia including heart palpitations, chest pain, sweating, shaking and chills. There are different types of treatment for autophobia and other phobias, some of which include, cognitive behavioral therapy, speaking to a mental health professional and exposure therapy.
Separation anxiety disorder or severe anxiety
Severe anxiety is not the same as a phobia. As mentioned, there are several different anxiety disorders and one of them is separation anxiety. This disorder can come from underlying issues from childhood, such as parental divorce or other childhood experiences that can sometimes lead into adulthood. There are different anxiety symptoms ranging from the fear of leaving home to the fear of leaving a loved one.
As for every other anxiety disorder, there are different anxiety levels that can go anywhere from extreme distress to panic attacks. The good news is there are different forms of treatment that can help reduce your fear caused by separation anxiety symptoms.
If at a certain point you want to work on your specific phobias or fear, find someone who can provide medical advice who knows your medical history. While you can try to self-regulate, there are treatment plans a therapist can help you with to help you overcome fear, including providing medical advice, exposure therapy or avoiding anxiety triggers.
Safety
Even if you don’t have a fear of being alone, safety is a concern when it comes to living alone. It can even give you trouble sleeping or provide doubts about even considering living alone. And, wanting to feel safe isn’t a bad thing, especially when there are situations, such as burglars, that are an actual threat.
If it makes you feel better, you can go to extreme lengths to make yourself feel physically safe in your own home. Consider products such as AddaLock or alarms to make your home feel safer and take away your fear.
Community
Another reason some people don’t like the thought of living alone is the sense of loneliness or a loss of community. We all rely on relationships in our everyday life, whether it be friends or family. These relationships are what make our lives full and interesting. When you feel like you’ve lost that, it’s hard and isolating.
However, just because you live alone doesn’t mean you are alone. Living alone can actually be a great way to cool down and give yourself a place to regroup after being around so many people.
How to help overcome the fear of living alone, or autophobia
Whether you have a fear or phobia of being alone or are just worried about loneliness, there are ways to overcome it. The following 13 strategies will help you get over your fear of being alone.
1. Do small things alone first
If you’re not used to being alone, then it might be a good idea to start doing small things alone first. Take yourself to lunch and enjoy the bliss of eating solo or take yourself to a movie and rejoice in being able to eat the popcorn all by yourself. No matter what kind of activity you pick, this is a great place to learn how to be your own best friend.
2. Get to know your neighbors
Once you get settled in, spend a few days checking out who lives around you. Listen to your gut and introduce yourself to those who seem trustworthy and start to build a relationship. Elderly couples and other women living alone is a good start.
We’re not talking about spending time with them, you don’t even have to become best friends. But having a neighbor to turn to, whether it’s to borrow a cup of sugar or to ask for help in an emergency, will go a long way toward helping you feel comfortable living alone. It would be an added bonus if you ended up with some new friends who would help with loneliness.
3. Keep friends and family in the loop
Whether you’re headed out on a date, going for a run in the park or traveling with your girlfriends, let your friends and family know your plans. You might consider using one of these free personal security apps, which will notify your emergency contacts if you don’t arrive at your destination. Plus, they offer a handful of other security features, like GPS tracking.
4. Keep your eyes wide open
Stay alert, stay alive. This is especially true when you’re entering and exiting your apartment. Be aware of the people in your surroundings and if a person gives you bad feelings, trust it and get to a safe place immediately.
When you’re in the parking lot of your apartment or condominium, keep your keys in hand and walk with confidence and focus. You may consider calling a friend and talking on your phone until you’re safely inside your car or in your home.
5. Purchase a security system
You don’t have to have a phobia or fear to have a security system. Security systems are no longer reserved for sprawling suburban estates. These days, well-respected security companies like Ring, ADT, FrontPoint and Protect America offer effective, budget-friendly security systems that are perfect for apartments, condominiums and lofts.
Opt for a wireless system so you don’t have to drill holes. As a bonus, wireless security systems are notoriously easy to install and when you’re ready to move, many providers will let you take your system with you.
Don’t open the door to anyone who knocks or rings the doorbell. Look through the peephole or ask the person for identification. If you feel uncomfortable opening the door, ask them to return at a later time. Or, you can call a neighbor and ask them to keep you company as you let the person visiting in.
6. Get a four-legged companion to ease autophobia
Nothing beats being greeted by a wagging tail after a long day at work. In addition to warming your heart and curing your loneliness, Fido can deter criminals and help alert you to danger. Of course, you’ll want to check with your landlord to make sure they allow pets before picking up your new furry friend.
7. Don’t blab about what you’re up to
Having some fear is good when it comes to keeping you safe. Whether it’s a friendly cashier or a new acquaintance, be wary of telling anyone you don’t know well that you live alone.
And while it’s tempting to update Facebook or Instagram with your whereabouts, doing so can put you in harm’s way. Avoid social media updates that can clue people into the fact that you live by yourself.
8. Give your home a lived-in look
Letting your mail pile up in the mailbox can tip off criminals you’re not home. If you’re going out of town, ask a trusted neighbor to keep an eye on your apartment. Consider putting interior lights on timers, so your apartment always appears occupied.
9. Cozy up your residence
Living alone is fabulous when you crave solitude, but it can get a bit lonesome. Make your residence a comfortable and lovely space, with pictures of friends and family and sentimental items like a favorite throw blanket or a beloved scented candle to combat loneliness.
Turning up the tunes can boost your spirits and mask those random creaks so you feel more at ease. Of course, you don’t want to upset your neighbors, so keep the volume reasonable. And don’t overdo it in the late hours. Voilà, home sweet home!
10. Pump up your social life
Loneliness is a state of mind more than anything else, but it doesn’t hurt to keep an active social life. Consider hosting a dinner party or inviting a few girlfriends over for a happy hour. Good company and laughter will make your house feel like a home in no time.
11. Lock doors and windows
No one wants to feel like they’re living in a high-security prison, but keeping doors and windows locked can offer you a valuable sense of security and ease your fear of living alone. Many apartments have sliding glass doors, often with subpar locks. Secure a sliding glass door with a metal sliding glass door lock or pole to help secure it. Remember to lock your door when you step out, even if it’s just for picking up the mail or keeping the trash out. It only takes a moment for someone to sneak in, so it’s better safe than sorry.
Before you move in, don’t hesitate to check that all door and window locks work properly. If they don’t, have the landlord fix them before you sign the lease.
12. Get informed about crime trends
Discovering what type of crime is happening in your neighborhood can help you feel more secure in your apartment because you’re more aware. There are a number of free crime-mapping websites, such as CrimeMapping.com, that reveal the location and type of crime, as well as the date of occurrence.
13. Have an exit plan
Create an exit plan in case of an emergency, such as fire, natural disaster or a break-in. If you will be out of your home for a few days, know whom you can stay with. Include your friends in the plan, so they can support you when needed. Keep all the items you want to take with you in the same room to create a calm and controlled setting in an emergency.
Living alone is fun!
Living on your own is a fun, exciting adventure. Make sure to take care of your mental health and make the most of this experience by using these tips to avoid the fear of living alone.
Both 15-year fixed and 30-year fixed refinances saw their average rates increase this week. The average rate on 10-year fixed refinance also inched up.
30-year fixed refinance: 7.21%
15-year fixed refinance: 6.56%
10-year fixed refinance: 6.43%
Despite ticking up in recent weeks, refinance rates have been slowly dropping from their peaks in 2023, bringing much-needed activity to the housing market. Experts say slowing inflation and the Federal Reserve’s projected interest rate cuts should help push mortgage interest rates down to around 6% by the end of 2024.
Over 82% of homeowners currently have interest rates below 5% on their property. If home loan rates stabilize over the next several months, more homeowners should be able to save money through refinancing. But in order for refinance applications to pick up in a meaningful way, rates would need to fall substantially, according to Mark Zandi, chief economist at Moody’s Analytics.
Mortgage refinance rates change every day. Experts recommend shopping around to make sure you’re getting the lowest rate. By entering your information below, you can get a custom quote from one of CNET’s partner lenders.
About these rates: Like CNET, Bankrate is owned by Red Ventures. This tool features partner rates from lenders that you can use when comparing multiple mortgage rates.
Current mortgage refinance rates
Refinance rates are currently between 6% and 7%, but your personal interest rate will depend on your credit history, financial profile and application.
Here are the average refinance rates reported by lenders nationwide. We track refinance rate trends using data collected by Bankrate:
Today’s refinance rates
Product
Rate
A week ago
Change
30-year fixed refi
7.21%
7.03%
+0.18
15-year fixed refi
6.56%
6.22%
+0.34
10-year fixed refi
6.43%
6.04%
+0.39
Rates as of Feb. 9, 2024
Where will refinance rates end up in 2024?
When mortgage rates hit historic lows during the pandemic, millions of homeowners were able to refinance to lower interest rates. While experts don’t anticipate another refinancing boom, it’s a positive sign that rates are now tending to move downward or sideways instead of soaring up.
For homeowners looking to refinance, remember that you can’t time the market: Interest rates fluctuate on an hourly, daily and weekly basis, and are influenced by an array of macroeconomic factors. Your best move is to keep an eye on day-to-day rate changes and have a game plan on how to capitalize on a big enough percentage drop, said Matt Graham of Mortgage News Daily.
What to know about refinancing
When you refinance your mortgage, you take out another home loan that pays off your initial mortgage. With a traditional refinance, your new home loan will have a different term and/or interest rate. With a cash-out refinance, you’ll tap into your equity with a new loan that’s bigger than your existing mortgage balance, allowing you to pocket the difference in cash.
Refinancing can be a great financial move if you score a low rate or can pay off your home loan in less time, but consider whether it’s the right choice for you. Reducing your interest rate by 1% or more is an incentive to refinance, allowing you to cut your monthly payment significantly.
Refinancing in today’s market could make sense if you have a rate above 8%, said Logan Mohtashami, lead analyst at HousingWire. “However, with all refinancing options, it’s a personal financial choice because of the cost that goes with the loan process,” Mohtashami said.
Reasons to refinance
Homeowners usually refinance to save money, but there are other reasons to do so. Here are the most common reasons homeowners refinance:
To get a lower interest rate: If you can secure a rate that’s at least 1% lower than the one on your current mortgage, it could make sense to refinance.
To switch the type of mortgage: If you have an adjustable-rate mortgage and want greater security, you could refinance to a fixed-rate mortgage.
To eliminate mortgage insurance: If you have an FHA loan that requires mortgage insurance, you can refinance to a conventional loan once you have 20% equity.
To change the length of a loan term: Refinancing to a longer loan term could lower your monthly payment. Refinancing to a shorter term will save you interest in the long run.
To tap into your equity through a cash-out refinance: If you replace your mortgage with a larger loan, you can receive the difference in cash to cover a large expense.
To take someone off the mortgage: In case of divorce, you can apply for a new home loan in just your name and use the funds to pay off your existing mortgage.
How to shop for refinance rates
The rates advertised online often require specific conditions for eligibility. Your personal interest rate will be influenced by market conditions as well as your specific credit history, financial profile and application. Having a high credit score, a low credit utilization ratio and a history of consistent and on-time payments will generally help you get the best interest rates.
30-year fixed-rate refinance
The average 30-year fixed refinance rate right now is 7.21%, an increase of 18 basis points over this time last week. (A basis point is equivalent to 0.01%.) A 30-year fixed refinance will typically have lower monthly payments than a 15-year or 10-year refinance, but it will take you longer to pay off and typically cost you more in interest over the long term.
15-year fixed-rate refinance
The current average interest rate for 15-year refinances is 6.56%, an increase of 34 basis points compared to one week ago. Though a 15-year fixed refinance will most likely raise your monthly payment compared to a 30-year loan, you’ll save more money over time because you’re paying off your loan quicker. Also, 15-year refinance rates are typically lower than 30-year refinance rates, which will help you save more in the long run.
10-year fixed-rate refinance
For 10-year fixed refinances, the average rate is currently at 6.43%, an increase of 39 basis points from what we saw the previous week. A 10-year refinance typically has the lowest interest rate but the highest monthly payment of all refinance terms. A 10-year refinance can help you pay off your house much quicker and save on interest, but make sure you can afford the steeper monthly payment.
To get the best refinance rates, make your application as strong as possible by getting your finances in order, using credit responsibly and monitoring your credit regularly. And don’t forget to speak with multiple lenders and shop around.