Current Mortgage Refinance Rates – Research Tips

In this lesson, I’d like to talk to you about current mortgage refinance rates and how to find them online. More importantly, I’d like to explain how the refinance rate affects you as the borrower. The interest rate is one of the most important concepts of mortgage refinancing, because it’s largely what determines whether or not it makes sense to refinance in the first place.

Rates Vary Based on Many Factors

Before we go any further, you need to understand that not everybody qualifies for the same refinance rates. If you think back to when you first bought the home, you’ll remember that the interest rate the lender gave you was partly determined by your credit score, your debt to income ratio, and the amount of money you put down on the loan. The same thing applies when you refinance the mortgage.

So while homeowner John might qualify for a mortgage refinance rate of 5% based on his credit score and other factors, homeowner Brian may only qualify for a rate of 6.25%. The interest rate you get when you refinance your home will be based on various factors, in addition to your credit score. Something to keep in mind.

How to Find Current Mortgage Rates

With that disclaimer out of the way, let’s talk about some of the places where you can find current mortgage refinance rates online. The first website you should visit is Freddie Mac’s weekly summary of mortgage rates. The Freddie Mac weekly summary offers a lot of information that’s valuable to a home buyer, or a homeowner who is thinking about refinancing. Basically, it shows you the average interest rates being offered by mortgage lenders across the United States, and it’s broken up by categories for 30-year fixed mortgages, 15-year fixed, and a couple of adjustable mortgage categories.

The summary shows you the average of rates given for each one of these loans, along with the average fees that are associated with them. Remember, this doesn’t mean you’ll automatically qualify for this type of mortgage refinance rate when you approach a lender. But it does give you a good idea of the average rates being offered in the current economy.

You can also find current mortgage refinance rates on websites such as Bankrate.com, MortgageLoan.com and Interest.com. For example, I’m looking at one of these websites right now while writing this article, and I can see that the average refinance rate for a 30-year fixed mortgage is 4.9%. This is slightly lower then a 30-year fixed rate that is shown on the Freddie Mac website. The reason for this difference is that the Freddie Mac website shows mortgage rates in general, while the website I am looking at shows current mortgage refinance rates in particular. It’s common for refinancing rates to be lower than the interest rates offered for purchase mortgages.

How the Interest Rate Affects Your Refinance

The only time it makes sense to refinance your home is when you save more money than what you spend. Here’s what I mean by that. When you refinance, you’re basically replacing your current mortgage loan with a new one. Ideally, you would get a lower interest rate on the new loan so that you can save money over the life of that loan. The amount of money you save with a lower interest rate should be more than the amount of money you pay in closing costs. Once you start getting quotes from mortgage lenders, you can plug the numbers into a refinance calculator in order to see how it measures up.

That’s why the interest rate is so important when it comes to mortgage refinance loans. If you want to qualify for the best interest rate the lender has to offer, you’ll need an excellent credit score. In the current economy, this means you’ll probably have to have a score of 750 or higher. You’ll also need sufficient equity — ideally 20% or more — in order to get the lender’s best rates.

The only way to know for sure what kind of refinance rate you can get from lenders is to apply for a loan. We get a lot of e-mails from website visitors who want to know if they’ll be able to refinance their home. But this is not the kind of question we can answer for people. You have to apply for loan in order to see what kind of mortgage refinance rates you can get. There is no way around this.

The good news is that you can get mortgage quotes for free from a wide variety of websites — including this website — and you’ll be under no obligation to proceed just by getting a quote. So there’s no reason why you shouldn’t apply for a refinance loan in order to see what kind of rates you might get.

Here’s what you should take away from this lesson.

You can find current mortgage refinance rates online through a variety of websites. But the rates you see are only averages taken from across the entire country. When you apply for a loan, the lender is going to review every aspect of your financial situation. They want to know what your home is worth in the current market, what your credit score is, how much equity you have in the home, and several other factors. Only then will they be able to tell you what kind of mortgage refinance rate you qualify for.