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What You Should Know About Refinance Interest Rates
Author David Schneider | Aug 29,2007
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Interest rates are one of the most important factors of a mortgage. When you are considering refinancing your current mortgage, the interest rate is going to play an important role. After all, it doesn't make sense to refinance your mortgage if your interest rate is going to increase. To help you understand interest rates better, it is a good idea to learn about the different interest rate trends for a variety of mortgage refinancing programs.
Traditional 30-Year Fixed Mortgage Refinancing Program
If you are looking to refinance your current 30-year fixed or adjustable rate mortgage, then a 30-year fixed mortgage refinance program is probably what you want to use. This program will provide you with a low fixed APR and it will allow you to cash out any equity you have earned so far. Currently, this type of mortgage offers some of the lowest APRs in the mortgage industry. For example, the average APRs reported for this type of loan in July of 2007 were between 5.25 percent and 7.13 percent.
15-Year Fixed Mortgage Refinance Program
If you are interested in refinancing your mortgage so that you can pay it off sooner, then you may be interested in using a 15-year fixed mortgage refinance option. The interest rates for this program are similar to those offered by the 30-year fixed refinance. The average APRs reported for this group of refinancing mortgages in July 2007 were between five percent and seven percent.
One-Year ARM Refinance
For people who will not be holding on to their homes for more than a few years, or for people who plan to refinance again in the next few years, a one-year ARM refinance can be a viable option. This loan product offers an extra low introductory APR during the first year and then it adjusts its APR annually after that. This means that your interest rate can go up or down depending on the movement in the price index. In July 2007, the average APRs for this type of loan product was between 3.88 percent and 8.88 percent.
3/1 ARM Refinance
A 3/1 Arm refinance is an adjustable rate mortgage product that offers a low introductory APR for the first three years and then it makes APR adjustments annually after that. This is a great option for people who want to lower their monthly payments for the next three years, and who plan on selling or refinancing their home at the end of the introductory period. The average interest rates charged by this type of mortgage program in July 2007 ranged between 4.5 percent and 7.25 percent.
30-Year Fixed FHA Refinance
For people who need a little extra help being approved for a refinancing mortgage, the Federal Housing Authority has a program you may want to check out. Their mortgage refinance program will allow you to refinance your current mortgage so that you can get better terms. The FHA doesn't issue the loan, they only insure it. The interest rates attached to these loans in July 2007 ranged between six percent and eight percent. |
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