15 Year Fixed Refinance Mortgage Rates

Interest rates on mortgages are about as low as they have ever been. Because of today’s low rates, many people are now trying to refinance their mortgage into a new loan, which could save them hundreds of dollars per month. While most people try to save money by refinancing into the low rate 30-year mortgage, most people could save even more money on interest by refinancing into a 15-year mortgage. While rates on these shorter mortgages are lower, banks only offer the lowest rates to the customers with the best credit profile. To get the best rate on a 15-year mortgage, there are several underwriting guidelines that a borrower must meet.

Good Credit History

The first way to get the lowest 15 year fixed refinance mortgage rates is to have an excellent credit history. During the mortgage underwriting process, a mortgage lender will pull your credit report and score. Your credit report displays your history of how often you made your previous loan payments on time and how well you have used credit. To qualify for a new mortgage loan, most borrowers will need a credit score of at least 700. However, to qualify for the lowest 15 year fixed refinance mortgage rates, you will probably need a score of at least 740.

Sizable Down Payment

The second way to get the best 15 yr loan rates would be to put forth a sizable down payment or equity contribution. In years past, many lenders provided mortgages to borrowers with as little as 0% down. Due to declining home values, and a high rate of mortgage defaults, lending to borrowers with 0% down has caused the bank to lose money on a transaction when the borrower defaults on the loan. To protect themselves, most banks require a borrower to have at least a 10% down payment and to get the best rate, they will normally need a 20% down payment.

Pay More Closing Costs

The third way to get today’s best 15 year fixed refinance rates would be to pay more closing costs. When you get a new mortgage, most borrowers have to pay closing costs, which could include title fees, underwriting fees, and various bank fees. While these fees can be expensive already, some borrowers could benefit by purchasing mortgage points at closing. This closing cost is beneficial to a borrower because each point paid will be used to buy down the interest rate, which could save a borrower thousands of dollars over the course of the loan.