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Mortgage rates remain steady for home purchases, rise for refinancing.
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According to data compiled by Credible, mortgage rates for home purchases have remained steady for three key terms, while one term has seen an increase since yesterday.
As of July 26, 2023, these rates are based on the assumptions provided. Please note that actual rates may vary. Credible, a trusted personal finance marketplace, has received over 5,000 Trustpilot reviews with an impressive average star rating of 4.7 out of 5.0.
What does this mean for homebuyers? Mortgage rates for 15-, 20-, and 30-year terms have remained above 7%, while rates for 10-year terms have stayed within the 5% range. However, today, rates for 10-year terms have risen slightly to 5.75%. On the other hand, 20-year terms continue to have the highest rate of the day at 7.875%. Rates for 15- and 30-year terms have remained unchanged at 7.125% and 7.5%, respectively. For those looking to save the most on interest rates, considering a 10-year term with a rate of 5.75% would be the best option. However, if a smaller monthly payment is preferred, 30-year terms offer the lowest rates among the longer terms.
To find excellent mortgage rates, you can start by using Credible's secure website, which allows you to compare current rates from multiple lenders without impacting your credit score. Additionally, you can utilize Credible's mortgage calculator to estimate your monthly mortgage payments.
In terms of mortgage refinancing rates, data from Credible shows that rates have increased for three key terms, while one term has remained stable since yesterday.
As of July 26, 2023, these rates are based on the assumptions provided. Please note that actual rates may vary. With over 5,000 reviews, Credible has maintained an "excellent" Trustpilot score.
What does this mean for homeowners considering refinancing? Mortgage refinance rates for longer terms continue to remain above 6%. Interestingly, shorter terms have now joined the longer terms in maintaining rates above 6%. Currently, rates for 20-year terms have remained unchanged at 6.625%. However, rates for 30-year terms have increased by a quarter of a percentage point to 6.875%. Additionally, rates for 10- and 15-year terms have risen to 6.25% and 6.125%, respectively. Homeowners looking to maximize their interest savings should consider the lowest rate of the day, which is 6.125% for 15-year terms. For those seeking lower monthly payments, 20-year terms offer rates that are a quarter of a percentage point lower than 30-year terms.
It's worth noting that today's mortgage interest rates are significantly lower than the highest annual average rate recorded by Freddie Mac, which was 16.63% in 1981. In 2019, before the COVID-19 pandemic, the average interest rate for a 30-year fixed-rate mortgage was 3.94%. However, in 2021, the average rate dropped to 2.96%, marking the lowest annual average in 30 years.
The substantial decrease in interest rates means that homeowners with mortgages from 2019 and older may have the opportunity to save a significant amount of interest by refinancing with today's lower rates. When considering a mortgage or refinance, it's important to take into account additional costs such as appraisal, application, origination, and attorney's fees. These factors, along with the interest rate and loan amount, contribute to the overall cost of a mortgage.
Various factors, including changing economic conditions, central bank policies, investor sentiment, and others, influence the movement of mortgage rates. The average mortgage rates and mortgage refinance rates reported by Credible in this article are calculated based on information provided by partner lenders who compensate Credible.
The rates assume that borrowers have a credit score of 700 and are borrowing a conventional loan for a single-family home that will serve as their primary residence. The rates also assume minimal or no discount points and a 20% down payment.
Please keep in mind that the mortgage rates reported by Credible only provide an idea of the current average rates. The rate you receive may vary depending on several factors.
Credit scores range from 300 to 850 and provide a snapshot of your credit history. To qualify for a conventional loan, which is not insured by any government agency, a fair credit score of at least 620 is typically required. However, it is possible to qualify for FHA loans, insured by the Federal Housing Administration, with a poor credit score as low as 500. Department of Veterans Affairs loans, available to veterans, active-duty service members, and their spouses, have no minimum credit score requirements. Similarly, United States Department of Agriculture loans, designed to assist very low-income Americans in purchasing homes in certain rural areas, also have no minimum credit score requirements.
If you're searching for the right mortgage rate, consider using Credible. Our free online tool allows you to easily compare multiple lenders and view prequalified rates within minutes.
Do you have a finance-related question but don't know who to ask? Feel free to email The Credible Money Expert at [email protected], and your question may be answered by Credible in our Money Expert column.