Mortgage Rates Fall for Week of June 7
After moving up, this week's mortgage rates fell slightly. With rates still at historic lows and not expected to stay that way forever, today's rate environment opens up many opportunities in home purchases or refinancing.
Mortgage rates moved down across the board on continued global economic volatility. HSH Associates reported that average combined rates for a 30-year fixed-rate mortgage (FRM) declined by 6 basis points from 5.21% to 5.15%. Rates for a 15-year FRM declined from 4.64% to 4.61%. Rates for a 5/1 adjustable-rate mortgage (ARM) fell from 4.28% to 4.23%.
These mortgage rates provide strong opportunities for buyers; home prices in many areas remain low, and the combined benefit of low mortgage rates and home prices is difficult to ignore. These record-low rates are predicted to not last, with increasingly tightened credit and still-stagnant economic recovery.
Need Refinancing? Take Advantage of Low Mortgage Rates
Refinancing your mortgage to a lower rate to reduce monthly payments is only the beginning of potential refinance benefits. Can't kick high-cost credit card debt? If you've preserved enough equity in recent markets, consider cash-out refinancing to retire costly consumer debt. A cash-out refinance can also help with funding repairs, remodeling, and other home improvement projects.
If you're worried about an ARM that's about to reset, refinancing to a fixed-rate mortgage can provide stable principal and interest payments and the peace of mind of knowing that your payments will pay down your balance by the end of the loan term. On the other hand, if you want to minimize your monthly payments to the lowest possible amount, a hybrid ARM offers lower average interest rates. This is a particularly attractive option if you don't intend to stay in your home very long.
Your ability to refinance depends on how much home equity you have. If your lack of home equity prevents you from getting a conventional refinance, consider a Home Affordable Refinance Program refi or an FHA refinance.
Shorter Mortgage Repayment Term Saves Money
If you're able to make larger monthly mortgage payments, refinancing from a 30-year mortgage to a shorter term, such as a 15-year mortgage, accelerates your payoff--saving thousands of dollars in interest paid over the life of your loan. Retiring mortgage-free is an accessible goal with the help of professional financial planning and historically low rates.
Our live database of current mortgage rates can help you find the best mortgage rates in your area.
