15-year mortgage

Apache is functioning normally

Apache is functioning normally

Additionally, initiated forbearance plans decreased in Q1 to 34,479, from 47,068 in Q4 2022. The total number of loans in forbearance at the end of Q1 stood at 65,757, coming out to 0.21% of the total loans serviced and 15% of delinquent loans.

Sixteen percent of home modifications in Q1 were modifications with principal forbearance, the report said. 35% of loan modifications completed in Q1 “reduced borrowers’ monthly payments by more than 20%,” the report’s findings said. “The number of refinances decreased amid rising mortgage rates from 111,251 in the fourth quarter of 2022 to 78,445 in the first quarter of 2023.”

The serious delinquency rate also decreased to 0.6% at the end of Q1, “compared with 4.01% for Federal Housing Administration (FHA) loans, 2.26% for Veterans Affairs (VA) loans, and 1.73% for all loans (industry average),” the report said.

Still, refinance transactions saw a slight uptick in Q1 despite being down overall for the quarter.

“[T]otal refinance volume increased in March 2023 as mortgage rates continued to decrease through February from the October peak of 6.90%,” the report said. “Mortgage rates rose in March: the average interest rate on a 30-year fixed-rate mortgage increased to 6.54% from a February level of 6.26%.”

The percentage of borrowers refinancing into shorter-term 15-year mortgages also increased to 14% in March, while the “average interest rate savings of a 15-year mortgage over a 30-year mortgage has been higher in 2022 and 2023 compared to previous years.”

Real-estate owned (REO) inventory also increased by 2% over the course of Q1 to 11,190 units.

“REO acquisitions outpaced property dispositions,” the report said of the change. “The total number of property acquisitions decreased slightly to 1,692, while dispositions rose 56% to 1,529 during the quarter.”

The number of foreclosure starts increased 6% during Q1 to 19,809, while third-party and foreclosure sales rose 12% to 3,700.

Source: housingwire.com

Apache is functioning normally

Apache is functioning normally

Today we’ll take a hard look at First Internet Bank, which is a frequent advertiser on the Zillow Mortgage Marketplace.

Their full name is actually First Internet Bank of Indiana, but seeing that they’re licensed to do business nationwide, why focus only on the Hoosier State?

Interestingly, their name is in fact factual because they are apparently the first FDIC-insured institution to operate entirely online.

Aside from offering checking, savings, and money market accounts, they also originate lots of home loans. That segment of their business will be the focus for this review.

First Internet Bank Fast Facts

  • Publicly traded bank founded in 1999 by David Becker
  • Corporate headquarters located in Fishers, Indiana
  • First FDIC-insured institution to operate entirely online
  • Offer home loans, personal loans, student loans, credit cards, depository accounts, and more
  • Originated about $700 million in mortgages last year
  • Licensed nationally but most active in Indiana, California, and Texas

First Internet Bank of Indiana was founded in 1999 by current CEO David Becker, who had a vision to conduct banking exclusively online.

He’s seemed to be on to something, because here we are 20 years later applying for home loans on our smartphones.

Anyway, you can be pretty confident they’re up to speed on technology seeing that their humble beginnings were driven by innovation and technology.

But they’re also a pretty large publicly-traded bank, so despite not having physical branches, they’ve got the soundness and security of a large financial institution.

Last year, the online mortgage lender mustered about $700 million in home loans, and may be on track for a $1 billion+ origination year in 2020.

They’re licensed to conduct business nationwide, but did the most volume in their home state of Indiana. A good chunk of business also came from California and Texas.

How to Apply for a Home Loan with First Internet Bank

  • Since they’re an e-bank you can apply for a mortgage directly from their website
  • Their digital mortgage platform is powered by fintech company Blend
  • It’s also possible to call them directly or chat with any of their loan officers online
  • Borrowers can complete most of the loan process remotely and paperlessly

You’ve got a few options to get the ball rolling with First Internet Bank. If you head over to their website, it’s possible to apply for a mortgage without any human assistance.

Simply navigate to their mortgage page, then select either “apply now” or “get pre-approved.”

Both options lead to the same place, a digital mortgage application powered by Blend.

It allows you to complete most of the application electronically, including the ability to link financial accounts, pay stubs, and employment information.

You can also eSign documents for fast delivery and once approved, you’ll be able to use their loan portal to satisfy any required conditions and to check loan status.

Those who wish to generate a pre-approval letter can do so via the same online mortgage application.

Alternatively, you can navigate to the loan officers tab and check out all the folks who work at First Internet Bank.

You can view their profile, contact information, and even chat with them immediately online if it shows they’re available.

If you’re old school, you can also simply call them up on the phone to get started.

All in all, you’ve got plenty of options when it comes to applying for a home loan, which is a nice touch.

And the fact that they use fintech company Blend for their digital mortgage process is also a big plus.

Home Loan Programs Offered by First Internet Bank

  • Home purchase loans
  • Refinance loans
  • Conforming loans
  • Jumbo home loans
  • FHA loans and VA loans
  • Construction-to-perm loans
  • Home equity loans
  • Home equity lines of credit
  • Fixed-rate and adjustable-rate options are available

First Internet Bank has home loan programs to suit most borrowers, including home purchase loans, refinance loans (rate and term and cash out), and construction loans.

The only big loan category they’re missing is USDA home loans.

However, they still offer conventional loans backed by Fannie Mae and Freddie Mac, jumbo home loans with just 10% down, FHA loans, and VA loans.

Additionally, you can get a home equity line of credit (HELOC) or a home equity loan, something many of the nonbank lenders can’t offer.

So if you’re in need of a second mortgage, even a piggyback mortgage, they might have the edge there.

They lend on all types of properties, including primary residences, second homes, and investment properties.

You can get a fixed-rate mortgage, such as a 30-year or 15-year mortgage, or an adjustable-rate mortgage, such as a 5/1 ARM or 7/1 ARM.

First Internet Bank Mortgage Rates

While they don’t list mortgage rates on their own website, Zillow shoppers may come across them when shopping rates via the Zillow Mortgage Marketplace.

From what I saw on Zillow, they offered competitive rates relative to other lenders listed, and often advertised lender fees under $100, or even just $1 on certain loan products (basically a no cost refinance).

They may have been an eighth of a percent higher than the cheapest lender listed, but with lower fees. So potentially still the best combination of rate and fees.

The fact that they operate entirely online means they can cut down on typical overhead costs incurred by brick-and-mortar banks. Hopefully those savings are passed onto you.

Why they don’t list mortgage rates on their own website is another question, but that’s their choice and not necessarily a bad thing.

However, you can request a free rate quote on their website, though only after providing your contact info. So calling or chatting may be best if you wish to remain anonymous at first.

All in all, they appear to be very reasonable pricing-wise on both rates and fees, so that shouldn’t be a concern for most prospective customers, but always put in the time to shop and compare with other lenders.

First Internet Bank Mortgage Reviews

First Internet Bank has a stellar 4.87-star rating on SocialSurvey based on over 1,200 customer reviews specifically regarding their mortgage division.

They’ve also got a 4.9 out of 5 rating on LendingTree with a 97% recommend rating.

On Zillow, they have a 4.7-star rating out of 5 based on over 600 customer reviews, with many reviewers indicated that both closing costs and rates were lower than expected.

Additionally, they take the time to respond to all the reviews on Zillow, so if you want feedback from your feedback, you’ll probably be in luck.

The company is also Better Business Bureau accredited and has been since 2013. They currently sport an ‘A+’ BBB rating.

So it seems clear they are a well-liked bank and mortgage lender across all the major ratings companies.

In summary, First Internet Bank is certainly worth considering if shopping for a home loan, assuming you are comfortable working remotely.

But this may make them better suited for refinances as opposed to home purchase loans.

First Internet Bank Mortgage Pros and Cons

The Pros

  • Offer a digital home loan process powered by Blend
  • Can apply for a mortgage without human assistance
  • Ability to chat with loan officers via their website
  • Excellent customer reviews from past mortgage customers
  • A+ BBB rating and accredited company
  • Appear to offer low mortgage rates with limited lender fees
  • Lots of different loan programs to choose from including home equity loans and lines
  • Free mortgage calculators on site
  • They service their home loans

The Cons

  • They do not list mortgage rates on their website
  • No mention of what lender fees they charge
  • Do not offer USDA home loans
  • No physical bank branches

Source: thetruthaboutmortgage.com

Apache is functioning normally

Ever wonder what share of borrowers are taking out a 15-year mortgage as opposed to a standard 30-year fixed? Or an ARM instead? Well, I was, and so I went looking for the data.

Fortunately, I was able to track down some of the details thanks to the Urban Institute, which provided me with some great statistics since the year 2000.

As you might expect, the 30-year fixed is the king of mortgage originations, though its dominance has been tested over the years. And it does depend if we’re talking about all originations, or just purchases.

Mortgage product type choice definitely varies if we’re talking about a refinance as opposed to a home purchase since borrower needs change over time.

Put simply, it’s more common for a borrower to choose the 15-year fixed when refinancing a mortgage, and a lot less likely to use one to buy a home.

Why is this? Well, generally borrowers will go with a 30-year term because it increases affordability, meaning they can buy more house at the outset.

Later, once they’ve built some equity (hopefully), they can refinance into a shorter-term fixed loan, such as the 15-year fixed, to save on interest and also ensure their loan term isn’t extended from the original maturity date.

Nearly 90% of Purchase Mortgages Were 30-Year Fixed Mortgages

  • The 30-year fixed is easily the most popular type of home loan available
  • It has been for decades and probably will be for the foreseeable future
  • Largely because it’s the cheapest and most pitched mortgage product
  • Ultimately ARMs are too risky for most homeowners and the 15-year fixed is too expensive

I spoke to the dominance of the 30-year fixed, and perhaps that was an understatement. The 30-year fixed claimed nearly 90% (89.5%) of the purchase market in June 2017, per data from Corelogic, eMBS, HMDA, SIFMA and Urban Institute.

It was actually higher at many times over the past 12 months, hitting 92.6% in July 2016.

Back in January 2000, the oldest month where there is data, the 30-year fixed accounted for just 70.3% of purchase mortgages.

Its lowest share since then was in December 2004 and March 2005, when it was selected on just 48.3% of new purchases.

In those same months, the adjustable-rate mortgage share was a staggering 41%. The ARM share continued to be quite high leading up to the housing crisis that ensued a few years later.

But in June 2017, the ARM share was a measly 3% of new purchase loans, which tells you today’s home buyer has very little interest in anything other than the safety of the 30-year fixed.

And only 6.1% are interested in the 15-year fixed, or perhaps only a small handful can actually afford the higher monthly payments thanks to DTI restrictions.

30-Year Fixed Less Dominant on Refinances

  • While still easily number one, the 30-year fixed is less popular when we consider refinance loans
  • You can thank the 15-year fixed mortgage for that
  • It’s a common choice for those looking to avoid resetting the clock
  • Since you can avoid a new 30-year term and also snag a lower interest rate

When it comes to refinances, the 30-year fixed is still the product of choice for most borrowers, but less so.

Per the latest data, the 30-year fixed held a 76.7% share of ALL mortgages in June. Meanwhile, the 15-year fixed grabbed a larger 14.3% share, while ARMs still held a paltry 3.3% share.

If we go all the way back to January 2005, we see the low point for the 30-year fixed across all mortgage originations. At that time, only 44% of borrowers chose it.

During the same month, the ARM-share was 38.7%, while the 15-year fixed grabbed a 9.9% share.

Back in January 2000, the 30-year fixed share was at 59.5%, while the 15-year fixed held 10.9%, and ARMs 21.5%.

So the 30-year fixed is still very popular, though not quite as much as it was back in December 2008, when its market share across all mortgages peaked at 88.4%.

The 15-year fixed peaked at 26.8% in April 2003 across all origination types. And ARMs peaked at 42.1%.

Market Share of All Mortgage Originations Since 2000

30-year fixed low: 44% (January 2005)
30-year fixed high: 88.4% (December 2008)

15-year fixed low: 4.2% (July, September 2007)
15-year fixed high: 26.8% (April 2003)

ARM low: 0.7% (April 2009)
ARM high: 42.1% (April 2005)

Market Share of Purchase Originations Since 2000

30-year fixed low: 48.3% (December 2004, March 2005)
30-year fixed high: 93.7% (March 2009)

15-year fixed low: 2.4% (Feb-May 2007)
15-year fixed high: 15.5% (Jan-Feb 2002)

ARM low: 0.5% (April 2009)
ARM high: 42% (April 2005)

Source: thetruthaboutmortgage.com

Apache is functioning normally

When my husband and I got married nine years ago, we had an audacious dream of paying cash for our first home. At that time, it was very much a far-off dream — we were just trying to survive the rigors and expenses of law school without going in debt. That alone was a seemingly gigantic feat.

But after three years of law school, my husband did graduate without debt, passed the bar, and we started planning for the future. Since we’d been renting for almost four years, my husband had a good job, and our second baby was on the way, pretty much everyone expected that buying a house would be in our immediate future.

I mean, after all, isn’t buying a house the responsible thing for a young couple to do? Well, maybe — or maybe not. We didn’t have much money in savings, and we weren’t sure how long we would be living in the town we were in, so we chose to go against conventional wisdom and continued renting.

Setting a Goal

Within the next six months, my husband lost his job, we relocated to another city so he could find work, I had some significant health problems in my pregnancy which resulted in numerous hospital and doctor’s bills, and we had our second baby. Needless to say, we were incredibly thankful that we hadn’t taken out a mortgage and then had to deal with the headache of trying to sell a house at the last minute — especially since the housing market was poor in our area.

It was around this time that we were first introduced to Dave Ramsey. While we didn’t have any debt and had always lived on a strict budget, going through his Financial Peace University Class fired us up to set big financial goals and work hard to accomplish them.

One of the big goals we decided to aim for was paying cash for our first home. We crunched a bunch of numbers and realized that, if we continued to live simply and frugally and worked hard to bring in extra money through side jobs, we could save enough over the course of five years to pay cash for a starter home.

It felt like a mammoth goal and we weren’t sure if we could do it, but we decided to go for it anyway. We figured that, even if we didn’t make our goal in five years, we’d at least be a lot closer to it than if we didn’t try at all! Plus, from our calculations, we’d be in a lot better position to wait to buy — even if it took seven years to save up enough for a house — than if we were to go ahead and get 15-year mortgage and pay it off early.

We knew that we could buy a decent starter home in the area where we were planning to move for around $100,000 to $110,000, so we divided $100,000 by 60 (since there are sixty months in five years) and set a goal to save $1700 every month. Because we didn’t have any debt or school loans, and because we lived simply and frugally, we were able to live on significantly less than we were making, thus freeing up a good chunk of money to put towards our house savings each month.

Gazelle-Like Intensity

Once we set this goal and I blogged about it publicly, we were incredibly motivated to work as hard as we could and delay every purchase we could in order to put as much as possible into our house savings fund. We used coupons, ate a lot of meatless meals, shopped at thrift stores, cooked from scratch, brown bagged it, continued to use our old and worn-down furniture, didn’t replace anything that wasn’t an absolute necessity, limited our going out to eat, only had one car, stayed home a lot, used gift cards from Swagbucks to buy any non-necessities, bought eye glasses from Zenni optical, learned to be content with what we had, and continued to live on a strict written budget.

Meanwhile, we also looked for ways to increase our income. I blogged, wrote ebooks, and took on freelance writing jobs. My husband did contract work, started his own law firm, and helped me running the blogging business.

That first year, we didn’t always make our monthly savings goals. We had some unexpected medical bills and car problems that ate up a portion of our savings. But we kept plugging away, throwing whatever extra we could squeeze out of our income toward savings.

The few years of long hours and hard work we’d put into blogging started to really pay big dividends and by the second year, we were meeting and exceeding our monthly savings goals every single month. As our house savings fund increased, we began to get so excited that we kind of went overboard and worked long, long hours in order to meet our savings goal even faster. I wouldn’t recommend putting in such long hours, missing so many social events, or sleeping so little, but the effort paid off because, at the end of two and a half years, we paid 100% down on our first home!

Even though I wish we had given ourselves a little more breathing room and margin while saving, it was thrilling, fulfilling, and exciting to achieve this goal — in half the time we had initially planned. And we are thankful we chose to take a counter-cultural route and pay cash for our house. Not having a mortgage payment has freed us to continue to save aggressively toward other goals, increase our spending in areas that really matter to us, and give generously to needs in our community and around the world.

Source: getrichslowly.org

Apache is functioning normally

National mortgage rates were mostly lower compared to a week ago, according to data compiled by Bankrate. Rates for 30-year fixed, 15-year fixed and jumbo loans moved lower, while rates for adjustable rate mortgages rose.

The Federal Reserve has raised rates 10 times in a row, most recently at its May 3 meeting. Rates now are at a 15-year high, but the consensus is that inflation is finally cooling and the central bank might halt raising rates.

”Mortgage rates have settled into a new normal of around 6.5 percent on a 30-year fixed-rate loan,” says Lisa Sturtevant, chief economist at Bright MLS, a large multiple listing service in the Middle Atlantic region. ”With growing recession risks, we could see mortgage rates dip lower, but we will not be returning to the 3 percent level seen during the height of the pandemic.”

Rates as of June 5, 2023.

These rates are marketplace averages based on the assumptions here. Actual rates listed across the site may vary. This story has been reviewed by Suzanne De Vita. All rate data accurate as of Monday, June 5th, 2023 at 7:30 a.m.

>>See historical mortgage interest rate movements

You can save thousands of dollars over the life of your mortgage by getting at least three rate quotes. Comparing mortgage offers from multiple lenders is always a smart move, but shopping around grew especially critical during the interest rate run-up of 2022, according to research by mortgage giant Freddie Mac. It found the payoff for bargain-huntng borrowers doubled last year.

“All too often, some homeowners take the path of least resistance when seeking a mortgage, in part because the process of buying a home can be stressful, complicated and time-consuming,” says Mark Hamrick, senior economic analyst for Bankrate. “But when we’re talking about the potential of saving a lot of money, seeking the best deal on a mortgage has an excellent return on investment. Why leave that money on the table when all it takes is a bit more effort to shop around for the best rate, or lowest cost, on a mortgage?”

Mortgage rates for home purchase

30-year mortgage falls, -0.20%

The average rate you’ll pay for a 30-year fixed mortgage is 6.99 percent, down 20 basis points since the same time last week. A month ago, the average rate on a 30-year fixed mortgage was lower, at 6.87 percent.

At the current average rate, you’ll pay $664.63 per month in principal and interest for every $100k you borrow. That’s lower by $13.48 than it would have been last week.

The 30-year mortgage is the most popular option for borrowers. It has a number of advantages. Among them:

  • Lower monthly payment. Compared to a shorter-term mortgage, such as 15 years, the 30-year mortgage offers more affordable monthly payments spread over time.
  • Stability. With a 30-year mortgage, you lock in a consistent principal and interest payment. Because of the predictability, you can plan your housing expenses for the long term. Remember: Your monthly housing payment can change if your homeowners insurance and property taxes go up or, less likely, down.
  • Buying power. With lower payments, you can qualify for a larger loan amount and a more expensive home.
  • Flexibility. Lower monthly payments can free up some of your monthly budget for other goals, like building an emergency fund, contributing to retirement or college tuition, or saving for home repairs and maintenance.
  • Strategic use of debt. Some argue that Americans focus too much on paying down their mortgages rather than adding to their retirement accounts. A 30-year fixed mortgage with a smaller monthly payment can allow you to save more for retirement.

15-year mortgage moves lower,-0.24%

The average rate you’ll pay for a 15-year fixed mortgage is 6.37 percent, down 24 basis points since the same time last week.

Monthly payments on a 15-year fixed mortgage at that rate will cost around $864 per $100k borrowed. Yes, that payment is much bigger than it would be on a 30-year mortgage, but it comes with some big advantages: You’ll come out several thousand dollars ahead over the life of the loan in total interest paid and build equity much more quickly.

5/1 ARM rate moves upward, +0.02%

The average rate on a 5/1 adjustable rate mortgage is 6.02 percent, climbing 2 basis points over the last week.

Adjustable-rate mortgages, or ARMs, are mortgage terms that come with a floating interest rate. In other words, the interest rate can change periodically throughout the life of the loan, unlike fixed-rate loans. These loan types are best for people who expect to refinance or sell before the first or second adjustment. Rates could be substantially higher when the loan first adjusts, and thereafter.

While borrowers shunned ARMs during the pandemic days of super-low rates, this type of loan has made a comeback as mortgage rates have risen.

Monthly payments on a 5/1 ARM at 6.02 percent would cost about $601 for each $100,000 borrowed over the initial five years, but could ratchet higher by hundreds of dollars afterward, depending on the loan’s terms.

Jumbo mortgage declines, -0.22%

The average rate you’ll pay for a jumbo mortgage is 6.98 percent, a decrease of 22 basis points over the last week. This time a month ago, the average rate for jumbo mortgages was lesser, at 6.94 percent.

At today’s average jumbo rate, you’ll pay $663.96 per month in principal and interest for every $100,000 you borrow. Compared with last week, that’s $14.83 lower.

Rate review: How interest rates have shifted over the past week

  • 30-year fixed mortgage rate: 6.99%, down from 7.19% last week, -0.20
  • 15-year fixed mortgage rate: 6.37%, down from 6.61% last week, -0.24
  • 5/1 ARM mortgage rate: 6.02%, up from 6.00% last week, +0.02
  • Jumbo mortgage rate: 6.98%, down from 7.20% last week, -0.22

Refinance rates

Current 30 year mortgage refinance rate trends down, –0.15%

The average 30-year fixed-refinance rate is 7.10 percent, down 15 basis points from a week ago. A month ago, the average rate on a 30-year fixed refinance was lower, at 7.01 percent.

At the current average rate, you’ll pay $672.03 per month in principal and interest for every $100,000 you borrow. Compared with last week, that’s $10.15 lower.

Where are mortgage rates headed?

The days of sub-3 percent mortgage interest on the 30-year fixed are behind us, and rates have so far risen beyond 7 percent in 2022.

“Low interest rates were the medicine for economic recovery following the financial crisis, but it was a slow recovery so rates never went up very far,” says McBride. “The rebound in the economy, and especially inflation, in the late pandemic stages has been very pronounced, and we now have a backdrop of mortgage rates rising at the fastest pace in decades.”

Comparing mortgage options

The 30-year fixed-rate mortgage is the most popular option for homeowners, and this type of loan has a number of advantages, including:

  • Lower monthly payment: Compared to a shorter term, such as 15 years, the 30-year mortgage offers lower payments spread over time.
  • Stability: With a 30-year mortgage, you lock in a consistent principal and interest payment. Because of the predictability, you can plan your housing expenses for the long term. Remember: Your monthly housing payment can change if your homeowners insurance and property taxes go up or, less likely, down.
  • Buying power: With lower payments, you can qualify for a larger loan amount and a more expensive home.
  • Flexibility: Lower monthly payments can free up some of your monthly budget for other goals, like saving for emergencies, retirement, college tuition or home repairs and maintenance.
  • Strategic use of debt: Some argue that Americans focus too much on paying down their mortgages rather than adding to their retirement accounts. A 30-year fixed mortgage with a smaller monthly payment can allow you to save more for retirement.

That said, shorter-term loans have gained popularity as rates have been historically low. Although they have higher monthly payments compared to 30-year mortgages, there are some big benefits if you can afford the upfront costs. Shorter-term loans can help you achieve:

  • Greatly reduced interest costs: Because you pay off the loan faster, you’ll be able to pay less interest overall.
  • Lower interest rate: On top of less time for that interest to compound, most lenders price shorter-term mortgages with lower rates.
  • Build equity faster: The faster you pay off your mortgage, the faster you’ll own value in your home outright. That’s especially handy if you want to borrow against your property to fund other spending.
  • Debt-free sooner: A shorter-term mortgage means you’ll own your house free and clear sooner than you would with a longer-term loan.

What are current mortgage rates?

Mortgage rates have been volatile because of the COVID-19 pandemic. Generally, though, rates have been low. Mortgage rates are rising and falling from week to week, as lenders are inundated with forbearance and refinance requests. In general, however, rates are consistently below 4 percent and even dipping below 3%. This is an especially good time for people with good to excellent credit to lock in a low rate for a purchase loan. However, lenders are also raising credit standards for borrowers and demanding higher down payments as they try to dampen their risks.

What comes next:

Featured lenders for today, June 5, 2023

Source: bankrate.com

Apache is functioning normally

Updated 11:18 a.m. ET June 5, 2023

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Marje, Getty

Mortgage rates are trending about the same across the board. Here are today’s average mortgage rates: 

  • 30-year fixed: 7.17%
  • 15-year fixed: 6.33%
  • 30-year jumbo: 6.89%

Current mortgage rates for June 2, 2023

*Data accurate as of June 1, 2023, the latest data available.

30-year fixed mortgage rates

Today’s 30-year fixed mortgage rate is 7.17%, which is lower than last week’s 7.35%, according to data from Curinos. This is an increase from last month’s 5.95%. Last year around the same time, 30-year fixed rates were 4.85%, which makes today’s rate much higher than it was a year ago.

At the current 30-year fixed rate, you’ll pay about $677 each month for every $100,000 you borrow — down from about $688 last week.

15-year fixed mortgage rates

The mortgage rates for 15-year fixed loans dropped today to 6.33% from 6.48% last week. Today’s rate is up from last month’s 5.35% and up from a year ago when it was 4.11%.

At the current 15-year fixed rate, you’ll pay about $862 each month for every $100,000 you borrow, down from about $870 last week.

30-year jumbo mortgage rates

The mortgage rates for 30-year jumbo loans dropped today to 6.89% from 6.93% last week. This is up from last month’s 5.79% and up from 4.50% last year.

At the current 30-year jumbo rate, you’ll pay around $658 each month for every $100,000 you borrow, up from about $660 last week.

Methodology

To determine average mortgage rates, Curinos uses a standardized set of parameters. For conventional mortgages, the calculations are based on an owner-occupied, one-unit property with a loan amount of $350,000. For jumbo mortgages, the loan amount is $750,000. These calculations assume an 80% loan-to-value ratio, a credit score of 740 or higher and a 60-day lock period.

Frequently asked questions (FAQs)

Mortgage rates are determined by a variety of factors, including the overall economy, inflation and the actions of the Federal Reserve. Mortgage lenders then set their loan rates based on these economic elements.

The rate you’re offered on a mortgage will also depend not only on the lender but also on your credit score, income, debt-to-income (DTI) ratio and other parts of your financial profile.

If you opt for a rate lock, you can typically do so for 30 to 60 days, depending on the lender. In some cases, you might be able to lock in your rate for up to 120 days.

Keep in mind that while some lenders allow you to lock in a mortgage rate for free, you’ll likely have to pay a fee for a longer lock period. This fee generally ranges from 0.25% to 0.5% of your loan amount. You could also be charged a fee if you want to extend the lock period — usually 0.375% of the loan amount.

There are several strategies that could help you qualify for the best mortgage rate, such as:

  • Checking your credit: When you apply for a mortgage, the lender will review your credit to determine your creditworthiness as well as your interest rate. In general, the higher your credit score, the lower your rate will be. So before you apply, it’s a good idea to check your credit to see where you stand. If you find any errors in your credit report, dispute them with the appropriate credit bureau to potentially boost your score.
  • Comparing lenders: Taking the time to shop around and compare your options from as many lenders as possible can help you find the best deal. In addition to rates, make sure to also consider each lender’s terms, fees and eligibility requirements.
  • Improving your credit score: If you have less-than-perfect credit and can wait to apply for a mortgage, it could be worth working to improve your credit beforehand to qualify for better rates in the future. Some possible ways to boost your credit include paying all of your bills on time and aiming to keep your credit utilization (the amount of credit you’ve used compared to your credit limits) on credit cards and lines of credit at 30% or less.
  • Reducing debt: Paying down debt could help lower your DTI ratio, which is how much you owe in monthly debt payments compared to your income. Having a lower DTI ratio can make you look like less of a risk in the eyes of a lender, which can result in a lower rate.
  • Choosing a shorter repayment term: Lenders typically offer lower rates to borrowers who opt for shorter terms. For example, you’ll likely get a lower rate on a 15-year mortgage compared to a 30-year loan.

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Blueprint is an independent publisher and comparison service, not an investment advisor. The information provided is for educational purposes only and we encourage you to seek personalized advice from qualified professionals regarding specific financial decisions. Past performance is not indicative of future results.

Blueprint has an advertiser disclosure policy. The opinions, analyses, reviews or recommendations expressed in this article are those of the Blueprint editorial staff alone. Blueprint adheres to strict editorial integrity standards. The information is accurate as of the publish date, but always check the provider’s website for the most current information.

Jamie Young is lead editor of loans and mortgages at USA TODAY Blueprint who has been writing and editing for online media for 12 years. Previously, she worked for Forbes Advisor, Credible, LendingTree, Student Loan Hero, and GOBankingRates. Her work has also appeared on some of the best-known media outlets including Yahoo, Fox Business, Time, CBS News, AOL, MSN, and more. Jamie is passionate about finance, technology, and the Oxford comma. In her free time, she takes care of her two crazy cats and ever-growing collection of plants. You can follow her on Twitter @atjamie.

Megan Horner is editorial director at USA TODAY Blueprint. She has over 10 years of experience in online publishing, mostly focused on credit cards and banking. Previously, she was the head of publishing at Finder.com where she led the team to publish personal finance content on credit cards, banking, loans, mortgages and more. Prior to that, she was an editor at Credit Karma. Megan has been featured in CreditCards.com, American Banker, Lifehacker and news broadcasts across the country. She has a bachelor’s degree in English and editing.

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Source: usatoday.com

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Refinancing a mortgage can be a great financial move for homeowners to potentially lower monthly mortgage payments, tap home equity, or build equity more quickly by shortening the term of the loan.  

Refinancing can save you money — but it can cost you money too. Before you start the refinancing process, you should know how it works, the benefits and drawbacks, and the steps you’ll need to take. 

What Is Mortgage Refinancing and Why You Might Want to Refinance?

Refinancing a home mortgage is basically replacing your existing mortgage with a new one, typically with a different principal and interest rate. 

There are many reasons why borrowers choose to refinance a mortgage, including: 

  • To take advantage of lower market interest rates
  • To shorten the term of their loan
  • To withdraw a portion of their equity
  • To lower their monthly payments with a longer repayment term
  • To convert from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage 
  • To remove or add another person to the mortgage

Choosing the Right Type of Mortgage Refinances 

There are three main types of mortgage refinances: rate-and-term, cash-out, and cash-in. 

  • Rate-and-term refinance: This type of refinancing allows the borrower to change the interest rate, the term of the loan, or both without advancing any new money.
  • Cash-out refinance: A cash-out refinance takes advantage of the built-up equity in the home and gives the borrower cash in exchange for a larger mortgage.
  • Cash-in refinance: A cash-in refinance allows homeowners to pay a large sum towards their principal balance during the refinance process.

4 Benefits of Refinancing a Mortgage

Your decision to refinance your home mortgage ultimately depends on your goal. Do you want to lower your monthly payments? Are you hoping to shorten the length of your loan? 

Here are some common reasons that people choose to refinance:

  1. Changing the length of your loan. By refinancing from a 30-year mortgage into a 15-year mortgage, you could pay it off in half the time. This also results in paying less interest; however, your monthly payment may go up.
  2. Switching to a different loan type. Some homeowners choose to refinance their mortgage to change their loan types. For example, refinancing from an adjustable-rate mortgage to a fixed-rate mortgage. The interest rate for an adjustable-rate mortgage can go up and down over time but the interest rate for a fixed-rate mortgage doesn’t change.
  3. Tapping into your home equity. Want to do some home improvements, pay off debt, or even take a trip? You can do a cash-out refinance to borrow more than you owe on your current mortgage.
  1. Getting a lower interest rate. Interest rates fluctuate for a variety of reasons. Refinancing could make financial sense if you can get a lower interest rate than when you originally took out your mortgage. If you can secure a lower interest rate, you could potentially save money and pay off your mortgage faster. 

Calculate how refinancing might affect your monthly payments with Total Mortgage’s Refinance Calculator and see how much you can save. 

How to Refinance a Mortgage: 4 Key Steps

Refinancing a mortgage is very similar to purchasing a home; however, it’s a little less complicated. But how exactly does refinancing your home work? Here is a simplified step-by-step guide:

  1. Understand your reasons for refinancing. Before you refinance, you need a clear goal. What do you want out of your refinance and what type of loan will help you achieve that goal?
  2. Apply for a refinance. Once you’ve selected your lender, you’re ready to complete your refinance application, lock your interest rate, and submit any necessary documents. Keep in mind that you don’t have to refinance with your current lender. Exploring other landers’ options could increase your chances of finding a better interest rate with more favorable loan terms.
  3. Appraisal and underwriting. The underwriter will review the application and documents and offer conditional and/or final approval of the loan. The lender will also order a home appraisal to verify the current home value.
  4. Close on the loan. The home closing is when you and your lender will go over the loan documents and finalize all details. You’ll need to sign documents and pay closing costs listed in the Loan Estimate and the Closing Disclosure.

The time it takes to refinance a mortgage depends on several factors, such as credit checks, appraisals, and the lender. Refinancing a mortgage can take anywhere from 15 days to 45 days or longer, with an average of 30 days to close. 

Costs of Refinancing a Mortgage 

Refinancing isn’t free — but depending on your circumstances, it can be worth it. Closing costs typically include origination fees, home appraisal, and recording. Depending on where you live and your lender, there could also be an attorney fee and title search, and insurance.

Closing costs are generally a percentage of your loan amount —about 2% to 5% — though these are just estimates and costs may vary depending on the state and county where you live as well as your lender.

Not every closing will cost you money at the closing table. You could also have a no-closing cost refinance. 

This is a refinance where instead of paying upfront, closing costs are either rolled into the new loan or the lender may raise your interest rate. While this does mean that you need to come up with less money at closing, you could end up paying more over the long run.

Explore Total Mortgage’s Refinancing Options

Unsure if you should refinance? Refinancing a mortgage could potentially lower your monthly payments with more favorable terms. Another option is to use a mortgage refinance to tap your home’s valuable equity and use the cash as you please. 

If you’re looking to refinance a mortgage, be sure to check out Total Mortgage’s list of branches across the US and find the one nearest to you. You can also apply online and get a free rate quote.

Source: totalmortgage.com

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A few weeks ago, I wrote about how I refinanced my mortgage for the second time in a year. The second refinance wasn’t actually part of my master plan, but I ended up having to refinance in order to remove my private mortgage insurance. And although refinancing our home again proved to be a huge pain, we are now saving $135 per month by no longer paying private mortgage insurance premiums.

Thankfully, we managed to secure a no-cost refinance that only cost us in time and effort. It’s a huge relief that the process is finally over, and I am fairly hopeful that this is the last time we will ever have to refinance.

Refinancing Has Its Perks

Luckily, I am no stranger to the benefits of refinancing. Not only did we refinance our primary residence, but we also refinanced our two rental homes within the past 18 months. We did so in order to take advantage of record low interest rates and to shorten the terms of their loans.

Now that we have refinanced our rental properties, they will be paid off much faster. In fact, our two rental properties are due to be paid off in about 13 years. Once they are completely paid off, we will then have another (somewhat) passive income stream and will be that much closer to our lifetime dream of early retirement.

Since I have refinanced properties so many times, I decided to write about some of the reasons that people choose to refinance. Like me, you may find that refinancing could save tens of thousands of dollars in interest and years of mortgage debt repayment. Unfortunately, it does take some effort to get the process started. However, the time and effort spent could easily be worth it depending on your situation. Here are some reasons that you may want to consider refinancing your home loan.

5 Reasons You May Want to Refinance

Refinance to shorten the term of your loan. If you have a 30-year mortgage, now may be a great time to consider refinancing. With record low interest rates, you may find that a 15-year mortgage is not much more expensive than the 30-year loan payment you have been paying.

Start by entering your information into a mortgage calculator to see what your new payment might be. If your new estimated payment is feasible, consider contacting a mortgage professional. (When we first refinanced our home from a 30-year mortgage at 5 percent to a 15-year mortgage at 3.25 percent, our payment only increased by about $200. Since the increase fit easily into our budget, the decision was a no-brainer.)

Refinance to lower your interest rate. As I mentioned before, interest rates are near a record low. And as I write this, 30-year mortgage rates are hovering above 3 percent and 15-year loans can be secured for an even lower rate. If your home is now financed at a higher interest rate, it may be a great time for you to consider refinancing. You could literally save tens of thousands of dollars just by taking the time to fill out the necessary paperwork and gather the needed documents.

Refinance to lower your payment. Refinancing your mortgage at a lower interest rate could mean drastically reducing your payment and saving tens of thousands of dollars in interest. Lowering your mortgage payment could also free up hundreds of dollars per month that could be saved or invested. Although refinancing to lower your payment could increase the term of your loan, it could make sense in your particular situation.

Refinance from an adjustable-rate mortgage to a fixed-rate loan. If you currently have an adjustable-rate mortgage, now may be the perfect time to refinance into a fixed-rate loan. Interest rates are low now, but they may not stay this low forever. Locking into a low, fixed rate can protect you from rising interest rates in coming years. Additionally, a fixed payment is easier to plan for and budget.

Refinance to cash out home equity. It’s a tempting proposition to cash out your home equity by refinancing your home. It could even be a great financial move in some circumstances. For instance, it may make sense to cash out some of your home equity in order to buy an investment property or start a business. It mostly depends on what you are trying to achieve and if you are someone who can manage your debts responsibly.

Can Refinancing Help You Meet Your Goals?

Before refinancing, consider what your goals really are. Do you want to lower your monthly mortgage payment? Do you want to pay off your mortgage and get out of debt faster? Only you can answer these questions.

It is also important to take all closing costs and fees into consideration. Depending on which new loan you choose, you may have to pay thousands of dollars in fees for your new mortgage. It may take several years to recoup the costs of refinancing, and it is important to identify your breakeven point. If you plan on moving in the near future, it may not make sense to refinance your home loan at all.

Do You Even Qualify For a Refinance?

Due to government-backed programs, you may be able to refinance your home even if you owe more than your home is worth. The Home Affordable Refinance Program, known as HARP, loosens requirements for traditional refinancing. According to MakingHomeAffordable.gov, your loan must meet several requirements in order to qualify:

  • The mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae.
  • The mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.
  • The mortgage cannot have been refinanced under HARP previously unless it is a Fannie Mae loan that was refinanced under HARP from March-May, 2009.
  • The current loan-to-value (LTV) ratio must be greater than 80%.
  • The borrower must be current on the mortgage at the time of the refinance, with a good payment history in the past 12 months.

Consider Refinancing Decisions Carefully

There are many things to consider before refinancing your mortgage. Most importantly, you should weigh the pros and cons of your particular situation and act according to your own best interest. With some thorough research and planning, refinancing your mortgage could turn out to be the best thing for your family and for your pocketbook. Have a look at the table below for the best mortgage rates.

Have you considered refinancing your mortgage? If so, why did you decide to refinance? If not, why haven’t you?

Source: getrichslowly.org