Home Insurance October 4, 2023—Rates Rise – Forbes Advisor

October 4, 2023—Rates Rise – Forbes Advisor

by Joshua Garcia

Refinancing Rates Soar: What You Need to Know

If you’ve been considering refinancing your mortgage, you might want to act fast. Refinance rates have jumped significantly, and experts predict they will continue to rise in the coming weeks. This means that homeowners looking to take advantage of historically low rates may need to act sooner rather than later.

According to Curinos, the current average rate for a 30-year fixed refinance is 8.10%. This is a considerable increase from previous weeks, when rates were below 8%. Similarly, 20-year fixed refinance rates have jumped to 8.00%, while 15-year fixed refinance rates are averaging 7.25%.

These rate increases can have a significant impact on homeowners’ monthly payments and the total interest paid over the life of the loan. For example, a borrower with a 30-year fixed refinance of $100,000 at the current rate of 8.10% would pay $740 per month in principal and interest. Over the life of the loan, the total interest paid would amount to around $166,568.

It’s important to note that these rates are subject to change and can vary based on individual circumstances and lenders. Additionally, refinance rates tend to be slightly higher than mortgage rates. This is something to consider when comparing lenders and loan programs.

So, should you refinance your mortgage now? The answer depends on your individual financial situation and goals. Refinancing can be a smart move if it allows you to lower your interest rate, reduce monthly payments, or pay off your loan more quickly. It can also be an opportunity to tap into your home’s equity or eliminate private mortgage insurance.

However, refinancing comes with costs, so it’s essential to calculate the break-even point to determine if the potential savings outweigh the closing costs. You should also consider your long-term plans for staying in the home, as refinancing is most beneficial when you plan to stay for a significant period.

If you decide to pursue refinancing, there are steps you can take to secure the best rates. Maintaining a good credit score, considering a shorter-term loan, and lowering your debt-to-income ratio can all increase your chances of qualifying for the lowest rates. Additionally, monitoring mortgage rates and acting quickly when rates drop can help you secure a favorable rate.

In conclusion, refinancing rates are on the rise, and homeowners should consider acting soon if they want to take advantage of lower rates. However, it’s crucial to weigh the costs and benefits of refinancing based on your individual circumstances. Consulting with a mortgage advisor or using online tools can help you make an informed decision.

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