2 reasons mortgage rates could rise in 2021

If you are considering refinancing your home at the lowest possible rate, your window may be closing. The coronavirus pandemic has made refinancing your home more attractive – and affordable – but things could change quickly over the next few months.

To make sure you get low mortgage rates, start your refinance request today. The Credible Multi-Lender Marketplace can help you compare rates and mortgage lenders, guiding you through the process remotely. Answer a few simple questions and see if you can save some money.

Mortgage rates have hit historic lows, thanks to actions by the Federal Reserve in March 2020 to help strengthen the economy amid the pandemic. Given this news, it’s no surprise that mortgage refinancing is booming. Homeowners want a better mortgage rate, a better mortgage term, and lower their monthly payment in the process.

However, the new Adverse Market Fee from the Federal Housing Finance Agency, which is equal to 0.5% of a total refinancing loan, has already made refinancing more expensive. As of December 1, all consumers who refinance their mortgage with a balance greater than $ 125,000 must pay additional fees. And that might be just the tip of the iceberg.

Are mortgage rates going to rise?

If you want to avoid even more costs (and headaches), you might want to refinance your home now. Here are two reasons why mortgage rates may rise soon:

1. Economic recovery
2. Distribution of COVID-19 vaccines

1. Economic recovery

Harvard Business Review reports that the global economy is recovering faster than expected. They assume that at least part of the reason the economy is recovering so quickly is that many fears, including the next great depression, never happened. Moreover, although unemployment rates have risen, they are lower than experts’ forecasts.

The real estate market has hardly suffered, with sales and listings remaining stable. While the Federal Reserve predicted that it would keep rates near zero until 2023, an improving economy could change that.

It is essential to work to get the lowest possible mortgage rates. With Credible, you can know your price and your estimated monthly payment in a few minutes. Plus, it’s free!

HOW TO LAND THE BEST MORTGAGE REFINANCE RATES

2. Distribution of COVID-19 vaccines

The potential for a viable vaccine against the coronavirus spurred a slight increase in mortgage rates the week after Pfizer and BioNTech announced on Nov. 18 that their Phase 3 trial was ending. Now, as the United States receives the vaccine, it is likely that consumer and investor confidence will rise – and mortgage rates could continue to rise with it.

While most financial experts agree that the Federal Reserve is not likely to raise benchmark mortgage rates anytime soon, mortgage rates could still move away from their record lows in the coming weeks and months. .

If mortgage refinancing is an option, take the time to do your research now to maximize your savings. Visit Credible to compare the rates and loan options of several lenders with fewer forms to fill out.

HERE’S HOW THE NEW MORTGAGE REFINANCE FEE AFFECTS YOU

Mortgage rates today

As of publication, here are the average mortgage rates for the following, according to Freddie Mac:

• The average 30-year fixed rate mortgage: 2.71%
• The average 15-year fixed rate mortgage: 2.26%

These low rates have prompted many homeowners to refinance current mortgages for lower rates.

To decide what is best for you, it may help to explore the mortgage options available based on current rates. You can visit Credible to easily compare mortgages by rate and loan terms without affecting your credit score.

HOW TO OBTAIN A MORTGAGE RATE LESS THAN 3%

Should I refinance my mortgage?

Not sure if refinancing your home loan is the right decision? While lower interest rates could benefit many homeowners, refinancing may not be the best decision for some consumers.

There are three questions you need to ask yourself before signing the dotted line.

1. Are you planning to move? Homeowners who plan to stay in their current property for at least five years are likely to benefit the most from refinancing. You should aim to at least recoup the cost of refinancing into savings before you move, and this can take several years, depending on how much you save on your mortgage payment each month. When considering your refinancing, be sure to visit Credible to connect with experienced loan officers to get your mortgage questions answered.

2. How much time is left on your loan? If you only have a few years left on your mortgage, refinancing could cost you more or extend the time you have left to pay off your loan. If you have less than 10 years on your current mortgage, take the time to do the math. An online mortgage calculator can help you decide if refinancing into a 15-year fixed rate mortgage is worth it.

3. What is your credit? To benefit from the best interest rates available, you will need a good credit rating. Lenders have tightened requirements as low interest rates have attracted more consumers. Before applying, consider reducing other debts and checking for any errors on your credit report that could affect your score. Want to see if you qualify? Head to Credible for pre-qualified mortgage rates without affecting your credit score.

THE BEST (AND WORST) REASONS TO REFINE YOUR MORTGAGE

Deciding to refinance your home is a big decision. Using a site like Credible is a helpful way to make sure you’re ready when you decide to move forward. Credible allows you to view pre-qualified rates from multiple lenders in one place. Visit Credible today to get started.