Apply Now–Refinance Rates Drop Below 3%

  • July 31, 2021
  •   •  
  • 4 min. read time
blog home exterior


In response to the FHFA’s recent announcement to eliminate the 0.5% adverse market refinance fee, mortgage lenders are driving mortgage rates lower in a race to compete for business. In the past two weeks, mortgage rates have dropped substantially, falling below 3% for qualified borrowers.  The official change takes effect on August 1, 2021. 

If you’re ready to refinance your mortgage, this is good news. Take action now to refinance your mortgage and access the lowest mortgage rates in years.

These quick steps can help you get started.

How to Fast Track Your Mortgage Application and Refinance Your Mortgage

Low interests rates are only one part of a mortgage refinance. The truth is, shopping for the lowest rate won’t always help you save money when you refinance your mortgage. Several factors directly impact your refinance rate, including your credit score, loan-to-value ratio, and the loan product. Specific lenders might advertise super-low refinance rates, but it may end up costing you more based on your approved mortgage rate and closing costs.

Step 1: Connect with a local mortgage advisor

Talk to a mortgage advisor right away if you’re considering refinancing your home mortgage. An experienced mortgage advisor can start the process quickly and help you lock in the lowest rate possible. What’s more, they’ll uncover hidden opportunities and customize a mortgage refinance to meet your long-term financial goals.

No matter your credit score or employment status, there are refinancing options available for most homeowners.

* If you’re facing foreclosure or nearing the end of forbearance, connect with a mortgage advisor today to discuss your options.

Find a qualified mortgage expert in your local area

Step 2: Estimate how much you can save

Use a free mortgage calculator to find out how much you can save when you refinance your mortgage. Decide which factors are most important to you, then connect with a mortgage advisor to discuss your mortgage goals. For example, maybe you want to refinance to a 15-year mortgage or change from an adjustable-rate mortgage to a fixed-rate mortgage.

Use this mortgage refinance calculator to see how much you can save

Step 3: Download your free credit report

You can download a free copy of your credit report once every 12 months. It’s a good idea to look for any errors in advance. Your credit score has a direct impact on the terms of your loan and your mortgage rate. By reviewing a free copy of your credit report early, you can fix errors ahead of time.

Click here to download your free credit report

Step 4: Gather required documentation for a refinance

Start gathering paperwork you’ll need to verify income and assets, employment information, bank statements, and tax returns. Ask your mortgage advisor for a quick list to help keep things on track. An experienced mortgage advisor will provide a checklist to follow and will make sure the process runs smoothly.

If you’re self-employed, your mortgage advisor can talk with you about additional information that might be required.

Questions about refinancing? We hear you.

What are my options for refinancing a mortgage?

If your current mortgage is more than 6 months old, here are the most common options worth considering:

  • Cash-out Refinance
  • Streamline Refinance
  • Rate and Term Refinance
  • Renovations & Remodels
  • Consolidate a Second Mortgage

Consider investment opportunities or other ways to extend your home equity. For example, refinance your mortgage with cash-out and invest in a second property. Or apply for a renovation loan to increase the value of your primary residence.

Can I refinance my mortgage without getting a home appraisal?

A home appraisal is necessary in many cases, but not always. Depending on your refinancing terms, the mortgage lender may require an appraisal to verify your home’s current market value.

However, you might have the option to bypass a home appraisal. Talk to a mortgage advisor to see if you qualify for a no-appraisal refinance. 

If you have an FHA loan or a VA loan, talk with a local mortgage advisor about the FHA streamline or the VA IRRRL (Interest Rate Reduction Refinance Loan). These are just a few refinance options that don’t require an appraisal.

RELATED: Talk with a local mortgage expert to find out if you qualify for a no-appraisal refinance

Are there closing costs to refinance a mortgage?

Yes. Most borrowers want to refinance a mortgage to save money and lower their monthly mortgage payments. However, if you refinance at a lower mortgage rate but face high closing costs, it might not save you money in the long run. We recently blogged about that here.

Review this sample Loan Estimate to find out which fees are negotiable. 

Closing costs typically include:

  • Origination Fee
  • Appraisal Fee
  • Credit Report Fee
  • Prepaid Homeowner’s Insurance
  • Prepaid Interest
  • Property Taxes
  • Mortgage Insurance

When you refinance a mortgage, many homeowners have the option to pay the closing costs upfront, roll them into the loan, or get a lender credit in exchange for a higher rate. Review the numbers to decide whether or not refinancing your mortgage is truly saving you money. 

RELATED: Learn the Truth About No-Closing Cost Loans

What documentation will I need to refinance my mortgage?

Refinancing a mortgage is similar to starting an application for a home loan, with a few exceptions. Mortgage lenders require varying documentation depending on the type of mortgage refinance.

Common documentation to pull together:

  • Identification such as a passport or driver’s license
  • Employment verification
  • Proof of income (e.g., pay stubs, W-2 statements, bonuses, alimony)
  • Tax returns for the past two years 
  • Recent bank statements
  • Investment account statements

If you’re self-employed, ask your mortgage advisor about additional information that might be required.

RELATED: How to refinance a mortgage when you’re self-employed

Summary

Refinance rates have dropped again and are below 3% for qualified borrowers. That said, refinancing your mortgage might not always be the best financial decision, especially if the fees and closing costs start adding up. Start your application early and review your loan estimate so you can compare potential savings. You can refinance your mortgage for a lower interest rate and a better mortgage payment by discussing your options with a qualified mortgage advisor. 

Next Steps

When you’re ready to refinance a mortgage, an experienced mortgage advisor can help you get the lowest rate and the best terms available. Connect with a mortgage advisor to discuss your options and make a plan that can help you save money on your mortgage. We’d love to help.

equal housing opportunityNMLS CONSUMER ACCESS LINK: NMLS #1850

© 2021 American Pacific Mortgage Corporation. For informational purposes only. No guarantee of accuracy is expressed or implied. Programs shown may not include all options or pricing structures. Rates, terms, programs and underwriting policies subject to change without notice. This is not an offer to extend credit or a commitment to lend. All loans subject to underwriting approval. Some products may not be available in all states and restrictions may apply. Equal Housing Opportunity.

Licensed by the Dept. of Business Oversight under the CRMLA.

Licensed as Preferred Rate in AL, CA, CO, FL, GA, IL, IN, KS, KY, LA, MA, MD, MI, MO, MS, NC, OR, TN, TX, VA, WA, and WI. Preferred Rate operates under American Pacific Mortgage in AZ and NV. AZ Corp BK 0906702. CA DRE #01215943. Regulated by the Colorado Division of Real Estate. Georgia Residential Mortgage Licensee. NV MB 2941/164. Licensed under the Oregon Consumer Finance Act.

Licensed by the Illinois Department of Financial & Professional Regulation, Residential Mortgage License # MB.6761304 | James R. Thompson Center | IDPR – Residential Mortgage Banking | 100 West Randolph St, 9th Floor | Chicago, Illinois 60601 | (844-)768-1713

Licensed by the Department of Financial & Professional Regulation, Residential Mortgage License # MB.6761304

The Department of Financial and Professional Regulation (Department) evaluates our performance in meeting the financial services needs of this community, including the needs of low-income to moderate-income households. The Department takes this evaluation into account when deciding on certain applications submitted by us for approval by the Department. Your involvement is encouraged. You may obtain a copy of our evaluation. You may also submit signed, written comments about our performance in meeting community financial services needs to the Department." (Source: P.A. 101-657, eff. 3-23-21.)

CONSUMERS WISHING TO FILE A COMPLAINT AGAINST A COMPANY OR A RESIDENTIAL MORTGAGE LOAN ORIGINATOR SHOULD COMPLETE AND SEND A COMPLAINT FORM TO THE TEXAS DEPARTMENT OF SAVINGS AND MORTGAGE LENDING, 2601 NORTH LAMAR, SUITE 201, AUSTIN, TEXAS 78705. COMPLAINT FORMS AND INSTRUCTIONS MAY BE OBTAINED FROM THE DEPARTMENT’S WEBSITE AT WWW.SML.TEXAS.GOV. A TOLL-FREE CONSUMER HOTLINE IS AVAILABLE AT 1-877-276-5550. THE DEPARTMENT MAINTAINS A RECOVERY FUND TO MAKE PAYMENTS OF CERTAIN ACTUAL OUT OF POCKET DAMAGES SUSTAINED BY BORROWERS CAUSED BY ACTS OF LICENSED RESIDENTIALMORTGAGE LOAN ORIGINATORS. A WRITTEN APPLICATION FOR REIMBURSEMENT FROM THE RECOVERY FUND MUST BE FILED WITH AND INVESTIGATED BY THE DEPARTMENT PRIOR TO THE PAYMENT OF A CLAIM. FOR MORE INFORMATION ABOUT THE RECOVERY FUND, PLEASE CONSULT THE DEPARTMENT’S WEBSITE AT WWW.SML.TEXAS.GOV.”