Mortgage refinancing rates fell this week to record lows after cancellation of the refinancing commission for an unfavorable market, valid from 1 August.
The Federal Housing Finance Agency (FHFA) introduced a 0.5% lender commission on Fannie Mae and Freddie Mac mortgages in December 2020 as a way to prevent losses caused by the COVID-19 pandemic, including canceling mortgages. But on Monday, the agency announced that it had decided withdraw this fee earlier than planned as a way to help homeowners take advantage of historically low mortgage rates.
Mortgage return loans issued now will not be subject to fees as they will not be closed until August 1st. As a result, we are already seeing that mortgage lenders pass the savings on to borrowers in the form of lower mortgage rates…
Don’t miss the opportunity to get record low mortgage rates. Lock your rate today having received pre-approval for mortgage refinancing on the online loan marketplace Credible. This will not affect your credit.
Mortgage refinancing rates hit record lows again
Mortgage rates of any length fell immediately after the FHFA announced that it would remove refinancing fees in unfavorable markets. Here are the current refinancing rates as of July 20th. according to Credible:
- 30 year mortgage refinancing: 2.625%
- Refinancing a mortgage for 20 years: 2,375%
- Refinancing a mortgage for 15 years: 2.000%
- 10 year mortgage refinancing: 2.000%
According to Credible, 30-year mortgage rates are the lowest ever, in line with the record rate set in January this year.
20-year refinancing rates hit an all-time low of 2.375%, which is particularly beneficial for new homeowners. By refinancing for a shorter loan term, you can keep your monthly payments the same, saving you years on mortgages. Paying off your mortgage quickly can save you tens of thousands of dollars during the term of the loan.
Refinancing your mortgage can also help you lower your mortgage payments, which will reduce your monthly housing costs. See Current mortgage rates from real lenders in the table below, including the annual percentage rate (APR). When you’re ready to start refinancing your mortgage, visit Credible to rate your new mortgage rate without a hard credit request.
How to fix historically low mortgage rates
Act quickly to lock in a good interest rate while mortgage rates are at an all-time low. Here’s how:
- Check your credit score. The minimum credit rating required for refinancing is around 620, but the lowest possible rate is reserved for highly qualified borrowers rated 720 or higher.
- Determine the loan-to-value ratio (LTV). You can calculate the LTV ratio by dividing your current mortgage balance (loan amount) by the present value of your home… The maximum LTV for regular refinancing is 95%.
- Pre-qualify through multiple lenders. This allows you to check your potential interest rate without affecting your credit rating. Compare offers for monthly mortgage payments, loan term and interest rate to determine which lender is right for you.
- Apply for mortgage loan refinancing. The lender will want to verify your income and identity in order to conduct a rigorous credit check. You will also have to rate your home before you close the loan.
You can check the estimated mortgage rate for multiple lenders by filling out one form on Credible. This ensures that you can lock in the lowest possible rate for your unique situation.
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