Comparing Current Refinance and Mortgage Rates

Published on: October 22nd, 2021 | Written by Jimmy Vercellino

Whether you are purchasing your first home or a relaxing vacation villa, your homeownership dreams can end with the wrong mortgage rate. Refinancing your current monthly payment, in addition, can be infeasible if a lender cannot give the numbers you are looking for. You could be paying tens of thousands extra on your total home loan instead of spending that money on your kids.

We understand your family comes first and believe that is who every good home loan should serve: they deserve a beautiful home or exciting vacation home they can be proud of, and you all can create lifelong memories. It takes the right mortgage and refinance rates to prioritize them and the wrong ones to shove them aside.

These figures fluctuate depending on the lender, so you must compare mortgage and refinance rates. Then, you can prevent wasting money with lenders that refuse to give you a competitive mortgage payment. That dream property you and your significant other have envisioned will disappear without the right rate.

What are Today’s Mortage and Refinance Rates?

Believe it or not, the average mortgage rates today are at an all-time low, being around 1% lower than pre-pandemic levels. That makes right now the best time to shop for a new or cheaper rate, beating your lender’s past offer. You can also obtain lower overall rates depending on the program you choose, where longer loans like a 30 year will have a smaller APR than a 15-year mortgage.

The Federal Reserve has deliberately kept interest and APR percentages low, which means they will go up again this December. To take advantage of some of the lowest rates on the market, these are the types of mortgages and rates you can find today (these may fluctuate):

ProgramInterest RateAPR
10-Year Fixed Rate1.98%2.1%
15-Year Fixed Rate2.14%2.24%
20-Year Fixed Rate2.71%2.79%
30-Year Fixed Rate2.98%3.03%
7/1 ARM2.56%3.13%
5/1 ARM2.46%3.24%
3/1 ARM2.92%3.56%
30-Year Fixed FHA2.3%2.97%
30-Year Fixed Rate VA2.46%2.46%

What Do These Rates Mean for Buying a Home?

In general, lower mortgage and refinance rates produce cheaper monthly payments, making home buying a more viable option. The figures above will change, as these percentages constantly change day-to-day, but your lender can introduce you to other strategies that can reduce your home costs.

For example, you can utilize a cash-out refinance program if you have equity in your current home and refinance for a higher amount. Lenders can funnel that equity increase into whatever home finance needs you have, such as home improvement and debt consolidation. Also, you can use discount points to pay your future interest upfront, lowering your monthly rate.

These additional home loan programs are excellent ways to reduce mortgage/refinance rates and make your dream home’s loan terms even more favorable.

Your Mortgage Rate FAQ

1. What is a Mortgage Interest Rate?

A Mortgage Interest Rate is the interest rate you will pay on your home loan each month, expressed as a percentage. Your lender will lump your mortgage interest rate into your loan’s monthly payment, and you will pay until its balance runs out.

Adjustable mortgage rates, on the other hand, are fixed only for a limited amount of time (3-10 years) and reset every year after the introductory period. This means that even minor mortgage rate adjustments can significantly affect your monthly payments.

A $50 increase in your home loan bill due to an adjustable mortgage rate will charge you $12,000 extra over a 20-year repayment period. Therefore, it is crucial to shop and compare mortgage rates to see what mortgage rate type is right for your loan.

2. How Do I Find Personalized Mortgage Rates?

When you apply for a home loan with a lender, they will provide you with mortgage rates and programs that fit your unique situation. Factors such as your credit score and loan-to-value will determine what percentage they can offer for the life of the loan. We advise having a credit score of at least 740 and a loan-to-value lower than 80% so a lender can provide favorable mortgage and refinance rates.

Different lenders can offer various personalized mortgage rates, so you should check with several local ones to your area and compare them. Mortgage brokers can also help you obtain a lower mortgage or refinance rate by aggregating different offers from local banks, national banks, online lenders, etc. However, they will charge you a fee for their services and may not be advisable if additional upfront fees are a concern.

3. How Will Lenders Calculate My Personalized Mortgage Rate?

A lender will calculate your personalized mortgage/refinance rate by looking over your home loan application. They will review all your personal information and present details, like your credit score, loan-to-value, credit history, and monthly income.

You can find mortgage calculators online that claim to give your interest rate and APR. However, lacking your personal information and knowledge of your unique home loan situation limits them from providing an exact figure.

4. When is the Best Time to Obtain a Mortgage?

If you have a steady, reliable income and you have saved enough for at least a 20% down payment, it is a good time for you to start looking at homes. Your lender will discuss your home loan application and advise you further on whether it is the best time to get a mortgage.

5. When Should I Lock In My Mortgage Rate?

Since rates fluctuate and you may not receive the favorable interest or APR rates you see today, we recommend confirming your mortgage rate quickly. You want to communicate this to your lend as soon as possible so they can do everything they can to ensure that average rate or one similar.

Also, they can offer you a float-down option that will ensure you do not miss out on that perfect rate, although they will charge a fee.

6. What is the Difference Between My Mortgage Interest Rate and ARP?

Your mortgage interest rate is your cost to borrow money from a lender for a specific time period. They will charge you every month as a percentage from the total loan amount. APR (annual percentage rate), on the other hand, includes your regular interest rate and additional loan expenses that the lender adds together. When you want to have a complete picture of costs outside the loan amount, APR is a solid figure to reference.

7. What are the steps for getting a mortgage?

There are several steps you will be involved with to get a mortgage loan for your dream home:

  • First, you need to search for the right lender that will help you find the best rates and loan terms. They are ideally advisers who will walk through the home loan process with you and answer any questions you have, including recommending a real estate agent. A good lender will be your main resource for conventional loans, FHA loans, VA loans, etc.
  • You also need to obtain pre-approval before you can shop for home loans. A lender needs to ensure you are trustworthy to handle their money and payback your loan amount according to its terms. They will send a pre-approval letter if they accept you.
  • Next, submit a formal loan application to your lender. They will carefully read over your current finances and determine what mortgage interest rate and APR’s you qualify for. You can choose out of these which one is right for your family or decline their offers.
  • The final stage in the process is discussing the underwriting and closing costs. Reviewing your income, credit score, credit report and bank statements, your lender will walk you through everything you all have discussed up to this point. Your home inspection and appraisal will follow and you can prepare to celebrate the closing!

What Matters to You Matters to Us

Mortgage and refinance rates are at an all-time low since COVID-19 began, making it an optimal time to purchase your dream home. And when you compare rates competitively, you can get the cheapest percentages so you can spend your money on who matters most. You can provide a larger home for your cramped family or a beach home for your busy 24/7 family.

We make it our mission to serve customers like you because we want to help you surprise your family with a property you all can call home. Our team genuinely cares about you getting your best mortgage rate.

If you have any general questions about mortgage rates, comparing them, or anything else, it would be our pleasure to help. Call our office at (480)-800-8387 so our team can clarify any confusing finance terminology and advise you.

Buyer Education