COVID 19 continues to put stress on the market causing rates to continue to drop! Mortgage rates have hit an all-time low in the first weeks of July.
30-year fixed rates have fallen 4 basis points to an all time low 3.03%! Just last week rates had falled 6 basis points to 3.07%. This time last year, 30-year fixed rates were down 72 basis points but the interest rates were around 4%.
Freddie Mac Rates
The weekly average rates for new mortgages as of 9th July were quoted by Freddie Mac to be:
30-year fixed rates fell by 4 basis points to 3.03% in the week. Rates were down from 3.75% from a year ago. The average fee also remained unchanged at 0.8 points.
15-year fixed decreased by 5 basis points to 2.51% in the week. Rates were down from 3.22% compared with a year ago. The average fee remained unchanged at 0.8 points.
5-year fixed rates rose by 2 basis points to 3.02% in the week. Rates were down by 44 points from last year’s 3.46%. The average fee remained unchanged at 0.3 points.
So should you refinance your mortgage now? Here are 4 signs you should refinance.
Is your current interest rate over 4%?
Last week, reports show that the average 30 year mortgage was around 3.29%. This time last year, the average rate was round 4.1% for the same 30 year term. Refinancing now can lower your monthly payment significantly, shorten your mortgage term, and even reduce total interest costs!
Is your credit in good shape?
When purchasing a home or refinancing your mortgage, its no secret that a higher credit score will put you in a better position for interest rates. Credit scores can range anywhere from 300-850. There are different tiers for credit scores and the higher the score, the better. It is important to pay off credit card debt and lower your credit utilization. Closing out credit cards that you are not using can also hurt you because it is better to have a $0 balance than close it. It is also important to check your credit report for any errors. Many people do not check their report and go months with incorrect information effecting their score.
Cash out equity
When you are refinancing your mortgage, borrowers have the option to take cash out if they have equity in their home. Most borrowers will use this large cash out to pay off debts on credit cards, pay for education, additional home improvements, or even start their own business. The more equity you have in your home, the more cash out you can take.
Do you plan to stay in your home for a long time?
When you refinance or purchase your home, there are additional costs that come along with the process. These costs includes closing costs and cost of appraisals. Because these costs vary, it is important not to refinance when you are planning on moving within the next few months. Due to these high additional costs, it can take months for a borrower to break even and begin actual savings.
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