This is what today’s refinancing rates look like. Should You Get a New Mortgage?
Refinancing rates for mortgages start the week higher than Friday. While refinance rates tend to be slightly higher than the interest rates on a new purchase mortgage, they are still pretty competitive, despite having increased since the start of the year. This is what the refinancing rates look like on Monday May 3rd:
30 year refinancing rates for mortgages
The average refinancing rate for 30 years is 3.282% today, an increase of 0.005% from Friday. At today’s rate, you pay $ 437.00 principal and interest for every $ 100,000 you borrow. That doesn’t include additional costs like property taxes and homeowner insurance premiums.
20-year refinancing rates for mortgages
The average refinancing rate for 20 years is 3.093% today, an increase of 0.015% from Friday. At today’s rate, you pay $ 559.00 in principal and interest for every $ 100,000 you borrow. Although your monthly payment increases by $ 122.00 for a $ 100,000 20 year loan versus a 30 year loan, you will save $ 23,168.00 in interest for every $ 100,000 you borrow over your repayment period.
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15-year refinancing rates for mortgages
The average refinancing rate for 15 years is now 2.579%, an increase of 0.008% from Friday. At today’s rate, you pay $ 671.00 in principal and interest for every $ 100,000 you borrow. Compared to the 30 year loan, your monthly payment is $ 234.00 more per $ 100,000 mortgage loan. However, your interest savings will be $ 36,726.00 per $ 100,000 mortgage debt over the life of your repayment period.
Should You Refinance Your Mortgage Now?
Refinancing your mortgage can be a wise financial decision when you can lower your interest rate and lower your monthly payments with a new home loan. However, there are a few important things to think about before starting refinance.
First, if you extend your loan repayment term, over time you could end up paying a higher total amount of interest than you would on your existing mortgage. This can happen even if you qualify for a lower interest rate as you would be paying interest over a longer period of time. You can avoid this by choosing a refinancing loan with a shorter repayment period. Or you decide that you are willing to pay more interest over the life of your loan in order to receive a reduced monthly payment.
Second, you need to consider closing costs. These are the upfront fees you will be charged when you refinance a mortgage. Researching the climb found that the closing cost of a refinancing loan for a home with an average score is the same overall $ 5,000 to $ 12,500. However, your closing fees will vary based on your mortgage size, your location, and your lender.
You may want to offset these closing costs with your lower monthly payments – but this can take time. If you refinance and save $ 200 per month and pay $ 6,000 in closing costs, it would take 2.5 years to break even. It’s important to double-check the numbers and see if you’re staying in your home long enough for the refinance to pay off.
In general, refinancing can make a lot of sense if you don’t intend to move within the next few years and you are able to cut the interest rate on your home loan by at least 1% (or anywhere near). If you have a high credit score – that is, a score in the mid-700s or higher – and a low one Debt-Income RatioYou may be entitled to a much lower interest rate than you are currently paying on your mortgage.
If the idea of refinancing sounds good to you, turn to a few others Refinance Lenders and see what prices and closing costs they are offering you. By comparing your selections, you can determine which offer is the best.