Today’s Mortgage and Refinance Rate: June 2, 2021

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Mortgage and refinancing rates have generally remained mixed since last week. Many have remained relatively stable or have increased slightly. However, rates remain at historically low levels overall.

If you are considering buying a home or refinancing, you may want to consider a fixed rate mortgage rather than an adjustable rate mortgage. These days, ARM rates start higher than fixed rates, and there is a possibility of rate increases in the future.

In general, rates are still at striking lows. Low rates often mean a struggling economy. As the United States continues to grapple with the economic impact of the COVID-19 pandemic, rates are likely to remain reasonably low.

Money.com conventional rates; RedVentures government guaranteed rates.

Find out more and get offers from several lenders »

The ARM 7/1 rate is the only mortgage rate above 4%, so this could be a great opportunity to get a low rate.

The rates for conventional mortgages, which you might think of as “standard mortgages”, are currently low. But you can often get an even better rate with a government guaranteed mortgage through the FHA or the VA, depending on how long you are looking for. Government mortgages are good options if you qualify.

Money.com conventional rates; RedVentures government guaranteed rates.

Compare the offers of refinancing lenders »

You can get a rate of less than 3% on a 15-year fixed mortgage or a government guaranteed mortgage if you want to refinance.

Mortgage rates are at an all-time low, so this might be a good day to set a rate, especially if you know you want to buy soon.

But rates will likely stay low for some time. So you don’t necessarily have to rush to take advantage of low rates if you’re not quite ready yet. You have time to improve your financial profile, which could help you get an even better rate.

To get the best possible rate, consider these steps before you apply:

  • Increase your credit score by making payments on time, paying off debt, or letting your credit age. The higher your score, the better.
  • Save more for a down payment. The minimum down payment you’ll need depends on the type of mortgage you’re looking for. But if you can make more than the minimum down payment, you’ll likely be rewarded with a higher rate.
  • Lower your debt-to-income ratio. Your DTI ratio is the amount you pay for your debts each month divided by your gross monthly income. Most lenders want your ratio to be 36% or less. To improve your ratio, pay off your debts or find ways to increase your income.

You can get a low rate right now if your finances are healthy, but you don’t have to rush to get a mortgage or refinance if you’re not ready.

Mortgage rate trends

Mortgage rates have fluctuated since last week, while government guaranteed loan rates have remained the same. Only ARM 10/1 rates changed by more than five basis points.

Trends in refinancing rates

Since last Wednesday, the refinancing rates for fixed and adjustable mortgages have fluctuated. However, government guaranteed mortgage rates have only changed by one basis point each.

If you get a 15-year fixed mortgage, you’ll pay off your mortgage over 15 years and your interest rate will stay the same all the time.

You will repay higher monthly payments with a term of 15 years than a longer term, because you repay the same loan capital in fewer years.

However, a 15-year term will cost you less than a 30-year term. You’ll get a lower interest rate and pay off your mortgage faster.

With a 30-year fixed mortgage, you’ll pay off your mortgage over three decades and your interest rate will stay locked in for the entire period.

It will cost you less per month with a 30-year fixed mortgage than a 15-year term because I spread my payments over several years.

Your total interest payments will be higher with a 30-year term than a shorter term because the 30-year term will carry a higher interest rate for a longer period.

An adjustable rate mortgage, often referred to as an ARM, will secure your rate for a specified period of time, and then it will change regularly. A 10/1 ARM locks in your rate for a decade. Then your rate will fluctuate once a year.

Although ARM rates are low right now, you may prefer a fixed rate mortgage. 30-year fixed rates are equal to or lower than ARM rates, so you have the option of locking in a low rate with a fixed mortgage. As a result, you won’t have to risk an increase in the ARM rate in the future.

If you are considering getting an ARM, ask your lender what your rates would be if you chose a fixed rate mortgage over an adjustable rate mortgage.

In addition to conventional mortgage rates, we have provided rates for FHA and VA mortgages, which are two types of government guaranteed home loans.

Government mortgages are guaranteed by federal agencies. They are less risky for lenders because the agency compensates the lender for default. Because they are less risky, lenders charge lower rates on government guaranteed loans than on conventional loans.

These mortgages generally have more flexible requirements when it comes to credit scores, debt-to-income ratios, or down payments.

Government guaranteed mortgages are great options if you qualify. Here are the three types:

  • FHA Mortgage: This type of loan is not limited to a certain type of person, so it is the most common government mortgage. This is especially useful if your credit score is not high enough to get a conventional mortgage.
  • VA Mortgage: You may be eligible if you are an active military or veteran.
  • USDA Mortgage: You may qualify if you live in a rural area and earn low to moderate income.

Mortgage and refinancing rates by state

Check out the latest rates for your state at the links below.

Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
new York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
Caroline from the south
South Dakota
Tennessee
Utah
Vermont
Virginia
Washington
Washington DC
West Virginia
Wisconsin
Wyoming

About the authors

Laura Grace Tarpley is Editor-in-Chief at Personal Finance Insider, covering mortgages, refinancing and loans. She is also a Certified Personal Finance Educator (CEPF). During her five years of personal finance coverage, she has written extensively on how to navigate loans.

Ryan Wangman is a review officer at Personal Finance Insider and reports on mortgages, refinancing, bank accounts, bank reviews, and loans. In his past writing about personal finance, he wrote about credit scores, financial literacy, and homeownership.



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