15 May Now is a Great Time to Refinance Your Home
As the COVID-19 pandemic continues to threaten and disrupt everyday life, we search for the silver linings, and we’ve identified a helpful one for you: If you’re a homeowner looking to cash in on a lower mortgage refinancing rate, now is a good time. At worst, certain rates have remained stable, and at best, others are dropping. Here’s a look at three of the most popular refinance rates and how they compare to the recent past.
30 Year Fixed Refinance
First, let’s identify the features of a 30 year fixed mortgage. As the most popular loan type, a 30 year fixed mortgage has an interest rate that stays the same for the length of the loan. Of course, there are opportunities to lower the rate through refinancing, and interest rates have been trending downward. While this type of loan carries a lower monthly payment than the ones below, it’s more expensive over time than a shorter term loan. Compared to a month ago when the average rate on a 30 year fixed refinance was at 4.22%, it’s dropped as low as 3.25%.
15 Year Fixed Refinance
Like a 30 year, a 15 year fixed mortgage also locks in the interest rate for the length of the loan. The primary difference is a lower interest rate and less interest paid over the life of the loan. This loan is best for people who want to pay off their loan quicker and with less interest. In recent weeks, the average for a 15 year fixed refinance has remained steady at around 2.75%.
10 Year Fixed Refinance
Similar to the above loans, a 10 year fixed mortgage lasts 10 years with an interest rate that stays the same during that length of time. The advantage of this loan is that you can pay off your home faster while paying less interest. At the same time, though, your monthly payment will be higher compared to 15 and 30 year loans. In the month of May, we’ve seen a drop in this rate to around 2.75%.
Changes Are On The Way
We know all too well that these are challenging times and that change is constant. To that end, some banks have been raising their mortgage borrowing standards. For example, JPMorgan Chase is now requiring new mortgage customers to have a credit score of at least 700 and make a down payment equal to 20% of the home’s value.
We encourage you to keep an eye on the latest refinancing news and rates as they are constantly changing.