Mortgage refinancing rates fell to record lows this week following the elimination of unfavorable market refinancing fees, as of August 1.
The Federal Housing Finance Agency (FHFA) implemented this 0.5% loan fee on Fannie Mae and Freddie Mac home loans in December 2020 to avoid losses caused by the COVID-pandemic. 19, including mortgage forbearance. But the agency announced on Monday that it had decided to eliminate these fees sooner than expected as a way to help homeowners take advantage of historically low mortgage rates.
Refi mortgages that are issued now will not be subject to fees as they will not close until August 1. As a result, we are already seeing mortgage lenders passing cost savings on to borrowers in the form of lower mortgage rates.
Don’t miss record-breaking mortgage rates. Lock in your rate today by getting pre-approved for mortgage refinancing in Credible’s online loan market. It will not affect your credit.
Mortgage refinancing rates have fallen to historic lows again
Rates for mortgages of all lengths fell immediately after the FHFA announced it would eliminate unfavorable market refinancing fees. Here are the current refinancing rates as of July 20, according to Credible data:
- Mortgage refinancing over 30 years: 2.625%
- Mortgage refinancing over 20 years: 2.375%
- Mortgage refinancing over 15 years: 2,000%
- Mortgage refinancing over 10 years: 2,000%
The 30-year mortgage rates are the lowest they have ever been, matching the same record rate set in January of this year, according to data from Credible.
20-year refinancing rates have hit an all-time low of 2.375%, which is particularly beneficial for new homeowners. By refinancing to a shorter loan term, you may be able to keep your monthly payments the same while saving years on your mortgage. Paying off your mortgage faster can save you tens of thousands of dollars over the life of the loan.
Mortgage refinancing can also help you lower your mortgage payments, allowing you to lower your monthly housing costs. View current mortgage rates from actual lenders in the table below, including the Annual Percentage Rate (APR). When you are ready to begin your mortgage refinance, visit Credible for estimate your new mortgage rate without a serious credit check.
How to lock in your historically low mortgage rate
Act quickly to get a good interest rate when mortgage rates are at record highs. Here’s how:
- Check your credit score. The minimum credit score needed to refinance is around 620, but the lowest possible rates are reserved for well-qualified borrowers with ratings of 720 or higher.
- Determine your loan to value ratio (LTV). You can calculate your LTV ratio by dividing your current mortgage balance (loan amount) by the current value of your home. The maximum LTV on conventional refinancing is 95%.
- Get prequalified with several lenders. This allows you to check your potential interest rate without impacting your credit score. Compare offers by monthly mortgage payment, loan term, and interest rate to determine which lender is right for you.
- Formally apply for the mortgage refinance loan. The lender will want to verify your income and your identity, so they will perform a credit check. You will also need estimate your house before closing the loan.
You can check your estimated mortgage interest rate from several lenders by filling out a single form on Credible. This ensures that you can lock in the lowest possible rate for your unique situation.
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