Refinance Mortgage Interest Rate

Expectations and realities are sometimes vastly different from each other. What one expects to find when looking for a refinance mortgage interest rate is a reasonable low rate. Actually, today’s refinance mortgage interest rates are very, very low. They are just above the interest rates for first mortgages. The realities of finding those low interest rates can become unexpected when you take a closer look at certain fees and other charges associated with obtaining that refinance mortgage loan.

First mortgage rates are very low for people with excellent or good credit records. Low interest rates for regular first mortgages are down to as little as 4.49% on a 15 year fixed rate loan or even less. The rate will depend upon the down payment amount, length of the loan, type of loan and other factors. The average person with decent credit, good income, and a 20% down payment can find a refinance mortgage interest rate around 5.12%. Some ads tout fixed interest rates for refinancing at 4.625% and 4.682% APRs, but once you apply the rates are determined by your individual circumstances.

For refinancing mortgage interest rates, the average person will find loans that have rates around 4.5% to 8.5%. However, home equity and refinancing second mortgage loans do come with many fees, including fees for the loan and appraisals. The sum of the fees plus any penalties that might occur due to late payments may offset a low interest rate and make that particular refinancing loan not a good deal. This is why it is important to compare offers and shop around for the best deal. You cannot make a decision unless you have read all the fine print about fees and penalties or other extra charges that might be included.

Some of the refinance mortgages are home equity loans and they do not have closing costs that ordinary mortgages have. To make up for this, lenders charge higher interest rates. If the refinance mortgage is going to be a long term commitment, paying the closing costs makes sense to get a lower long term interest rate. Closing costs for regular refinance mortgages are similar to those for first mortgages. There are appraisal fees, loan origination fees or points, lender or broker fees and other charges including prorated taxes and insurance.

Other things to look for in the small print for refinance mortgage interest rate loans would include any penalties you would have if you pre-paid the loan. Watch out for any clauses that indicate how changes in the interest rate are effected and when if there is a time table for interest rate changes. Loan amounts will be affected by new appraisals that reflect the decreas8ing values of homes today.

Judging by public comments from experts in the financial industry, today’s loan rates are an extreme bargain. Refinancing rates for persons with excellent credit can be almost as low as the record low rates for first mortgages, around or below the 5% mark. If this is a significant drop below the interest rate on a current mortgage, the refinancing of that debt is a sound idea that makes financial sense.