Refinancing rates August 12, 2021: Prices rise higher | MCUTimes

Refinancing rates August 12, 2021: Prices rise higher

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Bruce Bisping / Getty

Today, several major refinancing rates rose. Both the 15- and 30-year fixed refinancing rates increased, while the 10-year fixed refinancing also increased. Although refinancing rates are always fluctuating, they are currently at record highs. If you are considering refinancing, now may be the time to lock in a low fixed interest rate. Before refinancing, always review your personal finances and compare quotes from multiple lenders to find the right refinancing loan for your needs.

30-year fixed refinancing rates

The average 30-year fixed refinancing rate right now is 3.04%, up 10 basis points from a week ago. (A baseline equals 0.01%.) One reason to refinance a 30-year fixed loan from a shorter loan period is to lower your monthly payment. This makes 30-year refinancing good for people who are having trouble making their monthly payments or simply want a little more breathing space. However, the interest rates for a 30-year refinancing will typically be higher than the interest rates for a 15-year or 10-year refinancing. It will also take you longer to repay your loan.

15-year refinancing with fixed interest

The average interest rate on a 15-year fixed refinancing loan is currently 2.33%, an increase of 8 basis points from what we saw the previous week. With a 15-year fixed refinance, you get a larger monthly payment than a 30-year loan. On the other hand, you save money on interest rates as you pay off the loan faster. You typically also get lower interest rates compared to a 30-year loan. This can help you save even more in the long run.

10-year refinancing with fixed interest

The average interest rate for a 10-year fixed refinancing loan is currently 2.31%, an increase of 3 basis points compared to a week ago. Compared to a 30-year and 15-year refinancing, a 10-year refinancing will usually have a lower interest rate but higher monthly payment. A 10-year refinancing can be a good deal, as paying off your house before will help you save on interest in the long run. However, you should analyze your budget and your current financial situation to ensure that you can afford the higher monthly payment.

Where the courses are headed

We track refinancing developments using information collected by Bankrate, which is owned by CNET’s parent company. Here is a table of the average refinancing rates that lenders provide across the country:

Average refinancing rates

Product Rate A week ago Change
30-year-old permanent ref 3.04% 2.94% +0.10
15-year-old permanent ref 2.33% 2.25% +0.08
10-year-old permanent ref 2.31% 2.28% +0.03

Prices per. August 12, 2021

How to find the best refinancing rate

When looking for refinancing rates, know that your specific rate may differ from those advertised online. Although current market conditions will be a factor, your particular interest rate will largely depend on your application and your credit history.

To get the best interest rates, you typically need a high credit score, low credit utilization rate and a history of making consistent and timely payments. You can generally get a good feel for average interest rates online, but be sure to talk to a mortgage lender to see the specific interest rates you are eligible for. You should also take into account any fees and closing costs that may outweigh the potential savings of a refinance.

You should also know that many lenders have had stricter requirements when it comes to approving loans in the last few months. As such, you may not be eligible for a refinance – or a low interest rate – if you do not have a solid credit rating.

One way to get the best refinancing rates is to strengthen your borrower application. If you have not already done so, you can try to improve your credit by monitoring your credit reports, using credit responsibly, and managing your finances carefully. Do not forget to talk to several lenders and shop around to find the best price.

When should I refinance?

Most refinance because market interest rates are lower than their current interest rates or because they want to change their loan term. It is true that interest rates in the past year have been historically low. However, when deciding whether to refinance, be sure to consider other factors besides market interest rates.

To determine if a refinance is right for you, consider all the factors, including how long you plan to stay in your current home, the length of your loan period, and the size of your monthly payment. Also keep in mind that closing costs and other fees may require prior investment.

Note that some lenders have tightened their requirements since the beginning of the pandemic. If you do not have a solid credit score, you may not be eligible for the best rate. If you can get a lower interest rate or pay off your loan faster, refinancing can be a good step. But first weigh the pros and cons first to make sure it fits your situation well.

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