July 22, 2024
Mortgage

January 3, 2024—Rates Move Upward – Forbes Advisor


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The rate on a 30-year fixed refinance inched up today.

The average rate on a 30-year fixed mortgage refinance is 7.29%, according to Curinos, while the average rate on a 15-year mortgage refinance is 6.35%. On a 20-year mortgage refinance, the average rate is 7.13%.

Related: Compare Current Refinance Rates

Refinance Rates for January 3, 2024

30-Year Fixed Refinance Interest Rates

The current 30-year, fixed-rate mortgage refinance is averaging 7.29%, compared to 7.22% last week.

The annual percentage rate (APR) on a 30-year, fixed-rate mortgage is 7.32%, compared to 7.26% last week. The APR is the all-in cost of a home loan—the interest rate including any fees or extra costs.

At the current interest rate of 7.29%, borrowers with a 30-year, fixed-rate mortgage of $100,000 will pay $685 per month for principal and interest, according to the Forbes Advisor mortgage calculator. That doesn’t include taxes and fees. Over the life of the loan, the borrower will pay total interest costs of about $146,610.

20-Year Refi Rates

The 20-year fixed mortgage refinance is currently averaging about 7.13%. That’s compared to the average of 6.99% at this time last week.

The APR, or annual percentage rate, on a 20-year fixed mortgage is 7.18% compared to 7.04% at this time last week.

At the current interest rate of 7.13%, a 20-year, fixed-rate mortgage refinance of $100,000 would pay $783 per month in principal and interest. That doesn’t include taxes and fees. That borrower would pay roughly $87,993 in total interest over the life of the loan.

15-Year Fixed-Rate Mortgage Refinance Rates

The average interest rate on the 15-year fixed refinance mortgage increased to 6.35%. Yesterday, it was 6.29%. One week ago, the 15-year fixed-rate mortgage was at 6.35%.

The annual percentage rate on a 15-year fixed is 6.33%. This time last week, it was 6.34%.

A 15-year fixed-rate mortgage refinance of $100,000 with today’s interest rate of 6.35% will cost $863 per month in principal and interest. Over the life of the loan, you would pay $55,309 in total interest.

30-Year Jumbo Refinance Rates

The average interest rate for a 30-year, fixed-rate jumbo mortgage refinance is 7.17%. Last week, the average rate was 7.20%.

Borrowers with a 30-year, fixed-rate jumbo mortgage refinance with today’s interest rate of 7.17% will pay $677 per month in principal and interest on a $100,000 loan.

15-Year Jumbo Refinance Rates

A 15-year, fixed-rate jumbo mortgage refinance is 6.88%, on average, compared to the average of 6.84% last week.

At today’s interest rate of 6.88%, a borrower with a 15-year, fixed-rate jumbo refinance would pay $6,691 per month in principal and interest on a $750,000 loan. Over the life of the loan, that borrower would pay around $454,454 in total interest.

Are Refinance Rates and Mortgage Rates the Same?

Refinance rates are different from mortgage rates and tend to be slightly higher. The rate difference can vary by program and is something to consider as you compare the best mortgage refinance lenders.

In addition to having different refinance rates for conventional, FHA, VA and jumbo applications, cash-out refinance rates are higher as you’re borrowing from your available equity.

Rates for government-backed loan programs such as FHA and VA mortgage refinances can be lower than a conventional or jumbo refinance, as there is less risk for lenders. Still, you should compare your estimated loan’s annual percentage rate (APR), which includes all additional fees and determines the interest charges.

Know When to Refinance Your Home

Refinancing your mortgage can be a wise move for many reasons, most notably lowering your interest rate or your monthly payments. It can also help you pay down your mortgage sooner, access your home’s equity or get rid ofprivate mortgage insurance (PMI).

But there are closing costs associated with refinancing, so it probably makes more sense to refinance if you know you’ll be keeping your home for some time. You can determine the “break-even point” for a potential refinance, or how long it will take for savings from a new mortgage to surpass any closing costs. Find out what those costs will be and divide them by the monthly savings you’ll realize with the new mortgage.

The Forbes Advisor mortgage refinance calculator can help you run the numbers to see if it’s a good time for you to refinance.

Is Now a Good Time To Refinance?

Refinancing your mortgage can be worth it for reasons that include:

  • Lowering monthly payments. You might be able to reduce your monthly payment by extending your repayment period or qualifying for a better interest rate.
  • Reducing your interest rate. Switching from a 30-year mortgage to a shorter term, like 15 or 20 years, can help you get a better interest rate and pay less interest overall.
  • Ending annual service fees. FHA and USDA loans can charge annual fees for the life of the loan. If you have at least 20% equity, converting to a conventional mortgage refinance lets you avoid mortgage insurance premiums and guarantee fees.
  • Switching to a fixed interest rate. You may also refinance an adjustable-rate mortgage into a fixed interest rate to avoid future rate hikes that increase your monthly payment and total borrowing costs.
  • Borrowing your home equity. A cash-out refinance allows you to tap your home equity to consolidate high-interest debt and pay for personal expenses. The mortgage refinance interest rate can be lower than unsecured personal loans.

Lenders offer multiple mortgage refinance options to help you quickly compare your potential rate and monthly payment. Refinancing can also provide more repayment flexibility. Now isn’t a good time to refinance if you cannot get a smaller monthly payment or the closing costs offset the potential benefits of having a new rate and term.

How to Qualify for Today’s Best Refinance Rates

Just like when you took out your original mortgage, it pays to have a strategy for finding the lowest rate when you want to refinance. Here’s what you should be doing get a good mortgage rate:

  • Improve your credit
  • Consider a shorter loan term
  • Lower your debt-to-income ratio
  • Watch mortgage rates

There are no guarantees when it comes to borrowing, but a strong credit score is one of the best things you can do to present yourself to lenders. Banks and other financial institutions are more likely to approve you if you don’t have too much debt relative to your income. You should check in on mortgage rates, which fluctuate frequently, on a regular basis. And use calculators like ours to see if you can swing a home loan that’s shorter in duration than the popular 30-year mortgage. These loans usually have lower interest rates.

Frequently Asked Questions (FAQs)

How much does it cost to refinance a mortgage?

Closing costs for a refinance can be anywhere from 2% to 6% of the cost of the loan. It’s always a good idea to ask the lender what kind of closing costs they’ll charge before you decide to borrow from them.

How do you find the best refinancing lender?

Our guide to the best mortgage refinance lenders is a good starting point, but make sure you compare multiple lenders and get more than one quote. It’s always a good idea to find out the closing costs lenders charge, and also to make sure you can communicate easily with your lender. Conditions in the housing market change frequently, so being able to depend on your lender is crucial

How quickly can you refinance a mortgage?

You can usually refinance a mortgage in as quickly as 45 to 60 days, but it depends on many factors—like the type of home loan you choose. Always check with your lender before committing to borrow.



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