The average 30-year fixed rate mortgage fell below 3% for the first time in history in July, then hit a new record low of 2.88% on August 5. With mortgages at bargain-basement prices, borrowers are asking:
Is now the time to refinance my mortgage with an online lender?
Will Mortgage Rates Continue to Plummet?
The Fed stunned the market in March when it cut its target interest rate to 0.25% over concerns about the coronavirus pandemic’s impact on the U.S. economy. Any additional Fed cut would push the benchmark rate below zero, a move that is unlikely in the short-term.
Mortgage rates correlate closely with the Fed rate, but the bottom for mortgage rates is in sight. While there is no actual limit for how low mortgage rates can go, analysts have noted that 30-year fixed rates can’t fall below 2.25% without meeting significant resistance. Anything lower and mortgage investors will struggle to make returns – leading to lower investor demand and higher mortgage rates.
As of September 2020, the Fed has declared several times that they have no intention of raising the rate. In fact, there's a possibility that negative interest rates could be on the horizon.
Take advantage of falling rates with the top online lenders:
Is Now the Time to Refinance Your Mortgage?
If you’re thinking about refinancing, then now is the time to take action. According to Black Knight, a company that collects data on the mortgage industry, the number of American refinance candidates (defined as people with 720+ credit scores and at least 20% home equity who could cut their current interest rate by at least 0.75% with a refi) hit 19.5 million in August, up from just 8 million at the start of this year.
If the average 30-year fixed-rate mortgage falls to 2.75%, an additional 1.4 million mortgage holders will become refinance candidates, bringing the total to 20.9 million. If rates return to 3%, the number of refinance candidates will fall back to 17.8 million.
How Do I Get Started?
Before you decide on whether or not refinancing is right for you, be sure to compare multiple lenders so you can rest assured you're getting a good rate. Apply and compare our top mortgage refinancing lenders - and start saving today!
Quicken Loans is America’s largest mortgage lender, having closed nearly $145 billion in mortgages in 2019. According to Quicken, 98% of all home loans originated go through its Rocket Mortgage digital platform. With Rocket Mortgage by Quicken Loans, you can start your mortgage refinancing application and lock in a rate just by answering a few basic questions about your goals.
Thanks to a fully in-house process and a variety of loan options, AmeriSave is a good choice for customers seeking to refinance their mortgage. AmeriSave offers a variety of loan repayment terms to give borrowers the flexibility to find the right choice when they're refinancing. AmeriSave boasts a straightforward application process which helps streamline the approval process.