Market fluctuations and interest rate adjustments by the Federal Reserve have kept mortgages moving as homeowners refinance their homes. Borrowers with good credit rating and solid work history get the best rates. However, anyone paying down a note on a home may qualify for good refinance mortgage rates.
Rates in Massachusetts continue to provide homeowners with many opportunities to save. Many variables affect the amount of a refinance loan and the annual percentage rate (APR).
Understand what affects refinance interest rates
One might be able to save on the monthly mortgage payment by obtaining a reduced APR. Several elements of a current mortgage affect the refinance rate. Better rates apply to mortgages serving only 80% or less of the appraised value.
Buying down points can also help a family save. Some lenders will offer a buyer the opportunity to buy down a half point, whole point, or even two points of the interest rate. Buying a whole point would reduce a note from 6% APR to 5% APR. A point being 1% of the loan value makes an $80,000 mortgage cost $800 per point. This saves thousands over the life of the loan.
Refinancing a current home in Massachusetts
The larger the down payment one can bring to closing, the better. A no-cost mortgage usually indicates an arrangement where the broker adds the fees into the total loan price. Other no-closing-costs setups do not add onto the loan price, yet raise the interest rate to recover the fees.
Those who do not pay the fees out of pocket will pay it in ongoing interest payments. If possible, one should pay out of pocket in order to save hundreds in extra interest over the life of the loan.
A homeowner can pursue whatever reduction programs they might be entitled to with refinancing loans from Veteran’s Administration (VA) or through the Fair Housing Act (FHA).
30 year refinance rates
One can usually save more money by getting a 30-year mortgage. Shorter mortgages benefit buyers by getting them debt free quickly. However, banks offering 15-year mortgages may charge a higher APR. Since mortgage companies offer the lowest APR for long-term loans, a buyer can save most by taking a long-term note and paying it down quickly.
With a good down payment, good credit, and early repayment, one can get the best refinance mortgage rates in Massachusetts.
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