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Current Mortgage and Refinance Rates Tick Higher to Begin the Week | September 20, 2021

·6 min read

Content provided by Credible Operations, Inc. NMLS# 1681276, “Credible.” Not available in all states. www.nmlsconsumeraccess.org

Since last week, mortgage rates have begun to rise for both refinancing and home purchases.

If you’re thinking about refinancing an existing home or buying a new property, check out how rates are looking this week. The Fed could release a series of projected interest rate increases this week that might affect your ability to buy or afford a home. 

Current mortgage refinance rates for September 20, 2021

Mortgage rates are rising as the Fed will meet this Wednesday. Policymakers will release their interest rate projections during the meeting, and mortgage rates are rising in anticipation of more costly borrowing in the future. 

  • 30-year fixed refinance rates: 2.875%, up ↑ from 2.750% on Friday

  • 20-year fixed refinance rates: 2.500%, unchanged since Friday

  • 15-year fixed refinance rates: 2.125%, up ↑ from 2.000% on Friday

  • 10-year fixed refinance rates: 2.000%, unchanged since Friday

Rates last updated on September 20, 2021. These rates are based on the assumptions shown here. Actual rates may vary.

Make sure to shop around and compare rates with multiple lenders if you decide to refinance. You can do this easily with Credible’s free online tool and see prequalified rates in only three minutes.

window.credibleAsyncInit = function() { // #credible-rate-table is the selector of a div on the partner's site // where they want Credible's Rate table to be inserted into CredibleSDK.initWidget('#credible-rate-table', { // By default we load widget from production environment so nextoption is commented. Note that possible values for environment include: ‘production' or ‘stage'. // environment: 'production', // This is the widget configuration, partner can specify marketplace, type and variation for a widget product: { marketplace: 'mortgage-combined', type: 'rate-table', variation: 'interactive' }, ui: { scrollTopPad: 50 }, analytics: { // "source" value will be translated to "utm_source" when the user clicks on the widget CTA. This parameter is optional. // source: 'example-source', uniqueId: 'cae47e7e-701a-5bcf-bcf0-a71aeff5341f' }, // Optional data to be sent to tracking events meta: { contentId: 'cae47e7e-701a-5bcf-bcf0-a71aeff5341f', articleTitle: 'Lower Your Interest Rates', articleTags: '/FINANCE/MONEY/PERSONAL WEALTH,/GLOBAL NEWS', segmentId: 'a189e5b6-7796-4b77-9663-26b47a1c34e8' }, // Here the partner can specify a unique id for a user, page or other value. // uniqueId: 'example-uniqueId', // Optional callback that will be called if present once widget is inserted into the DOM onWidgetInit: function(){}, // Optional callback that will be called if an unhandled error is thrown during widget rendering phase onWidgetError: function(){}, }); // #credible-rich-cta is the selector of a div on the partner's site // where they want Credible's Rich CTA to be inserted into CredibleSDK.initWidget('#credible-rich-cta', { product: { marketplace: 'mortgage-combined', type: 'rich-cta', variation: 'interactive' }, }); }; Current mortgage rates for [Month Day, Year]

Like today’s refinance rates, current mortgage rates are rising since last Friday.

  • 30-year fixed mortgage rates: 2.875%, up from 2.750% last Friday

  • 20-year fixed mortgage rates: 2.500%, unchanged since last Friday

  • 15-year fixed mortgage rates: 2.125%, up ↑ from 2.000% last week

  • 10-year fixed mortgage rates: 2.000%, unchanged since last Friday

Rates last updated on September 20, 2021. These rates are based on the assumptions shown here. Actual rates may vary.           

It seems as though refinancing and home purchase rates are aligning with one another. As the real estate bubble begins to deflate and investors believe interest rates will rise, it stands to reason that banks will begin charging more to prepare customers for the future.

How to qualify for a lower mortgage rate

Many factors influence the mortgage rate and terms a lender may offer you. The factors lenders will consider include:

  • Your credit scores and credit history

  • How much you want to borrow

  • The repayment term you’re seeking

  • How much downpayment you have

  • Your income

  • Other factors

Fortunately, you can take steps to make yourself as appealing as possible to potential lenders —  and score the best mortgage rate available to you: 

  1. Pay off debt. Reducing other debts before you apply for a mortgage can help improve your credit score by reducing your debt-to-income ratio. It can also help ensure you’ll have enough disposable income to be able to make your monthly mortgage payment. 

  2. Go for a shorter term.  Ten-year and 15-year mortgages tend to have the lowest interest rates. That’s because the shorter term means less risk for lenders. If you’re able to swing a higher monthly payment, a shorter term could mean a lower interest rate and big interest savings for you over the life of the loan. 

  3. Put as much down as you can. Lenders —  and many sellers —  like to see a down payment of at least 20% (more if you’re able). A bigger down payment could help you get a lower rate, set you apart from other buyers, and help you avoid costly private mortgage insurance (PMI).

  4. Check out first-time homebuyer programs. There are federal and state programs that help first-timers with down payments, closing costs, lower interest and more. Some even offer grants.

  5. Maintain your income . Try to  avoid changing or quitting jobs before you apply for a mortgage. 

  6. Consider mortgage points. Mortgage points are a closing cost that you pay to the lender up front in exchange for a lower interest rate. While the points may feel like a big hit at first, a lower interest rate could add up to big interest savings over the life of a mortgage.

Mortgage interest rates forecast

Mortgage rates are closely tied to the federal funds rate —  the interest rate banks charge each other when borrowing or lending their excess reserves overnight. The Federal Reserve sets a target rate for banks to follow. 

When the economy isn’t great, the Fed may lower rates, and mortgage rates usually fall too, since it becomes cheaper for lenders to make loans. When the economy improves, the Fed may raise rates to try to contain inflation —  and mortgage rates could climb.

While no one can exactly forecast how mortgage rates will behave, that federal funds rate and inflation are among several key indicators that experts can consider when making predictions. Researchers  at the Mortgage Bankers Association, Freddie Mac and Fannie Mae all predict —  to varying degrees —  that  mortgage rates will rise throughout 2021. 

But keep in mind that average rates are no guarantee of the rate you might qualify for when applying for a mortgage. Your credit score, down payment amount, income and many other factors will also come into play.

For your next home purchase, consider using Credible. You can check current mortgage rates from all of our partner lenders without affecting your credit score. Our free online tool is safe and simple to use — and it only takes a few minutes to prequalify.

What causes mortgage rates to fluctuate?

When you get a mortgage, there are several factors that influence the total cost of your loan. These factors include:

  • Inflation - Inflation is always going up, and the rate at which it rises impacts your spending power.

  • Economic conditions - The country’s economic condition determines interest rates as banks must attract customers and the government must work to stabilize the economy.

  • The Federal Reserve - Federal Reserve board members can choose to rise and lower interest rates at any time, responding to prevailing economic conditions. 

  • Origination cost - Mortgage lenders charge a world of fees to initiate and close on a loan. Find a mortgage company that keeps these costs as low as possible. 

  • Your own financial/credit history - Do you best to keep your debt-to-income ratio low. Pay off debts. Save for a down payment so that you are ready to obtain a loan and close quickly.

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