Best Refinance Rates
The best refinance rates may not be as easy to find as you might think. The most common question that people ask, understandably, is when to refinance in order to get the best mortgage rates. In a broad sense this question is nearly impossible to answer, given the number of factors that go into the question of when to refinance. As many have said, if the bond market was predictable there would be a lot more millionaires out there, and the question of when to refinance would be much easier. Unfortunately financial markets are never incredibly predictable, despite what some would have you believe. Thus we will give advice about when to refinance to get the best home loan rates but this does not mean we or anyone can ensure that we can guide you to perfect timing. In other words, do not try to be too precise when wondering when to refinance because waiting for the very best refinance rates may actually lead you to miss opportunities.
Guide to this best mortgage rates page
On this page we go over how to find the best refinance rates out there, and how to ensure that you get the terms necessary to enable you to take advantage of decreases in interest rates later on. Our “Lowest Refinance Rate” page then helps you set yourself up so that after you find the best home loan rates you are able to be approved for one. As you will see, there are three steps in this process: understanding the market, getting terms that allow you to lower your rates if they drop, and then knowing who to refinance with.
Best Mortgage Rates, Timing
If you are looking to know when to refinance in order to get the best refinance rates the first step is understanding how these rates are derived.
Best mortgage rates: How are they derived
One step removed is the bond market from which mortgage rates are derived, and one step back from that is the long-term health of the economy. So while following the mortgage interest market may be helpful, following and knowing how to try to predict subtle changes in the bond market will help you know when to refinance to get the best mortgage refinance rates. And what guides these subtle changes? One factor, perhaps a major factor, is the health of the economy. In a poor economy bond rates tend to be deflated, while as the economy improves they tend to rise. Bond rates are not incredibly impulsive, so they might not move significantly after one piece of economic news like the stock market does.
Best refinance rates: When to act
Now these factors related to the economy do not usually change too much over the course of one or two weeks, so predicting how to get the best home loan rates on a day by day basis after you’ve chosen to refinance can be fruitless and may actually lead you to wait too long. Often once rates are where you hoped you should apply then instead of waiting for minute changes. The exception to this is when you really need that last quarter of a point to make things worthwhile. In this case you are not just looking for the best refinance rates but rather a particular target.
Many homeowners have an exact number in mind when considering current best mortgage refinance rates and they definitely will lock when the rates hit that number. Perhaps they even have a broker who is watching the best home loan rates and will call when the rates sink that low. That strategy prevents people from missing the chance to refinance, and it takes some of the anxiety out of the decision.
Best Mortgage Refinance Rates: Terms
You might think that the first step we covered above is really the only step that you need to take in order to get the best home loan rates, but that is not the case. There are terms you can get with your new mortgage product that can help you even more.
Best refinance rates involve a float
The best example is a “float down” that allows you to lower your rate a fixed number of times (most commonly just once) if the best mortgage rates fall a certain amount. Sometimes when the best mortgage refinance rates are even just a quarter of a point lower than they are when you originally locked you might be able to re-lock if you have a float. This can really take the pressure off knowing exactly when to decide to refi – you really don’t have to worry about knowing exactly when the best refinance rates are available because you can float down if necessary.
Best mortgage refinance rates allow another refi
Another term you’ll want to look for in your refinance to ensure that you can take advantage when the best mortgage rates become available is the ability to refinance soon after you close. Some mortgage products make you wait a certain period of time before you can refinance again, and this can prevent you from getting the best mortgage refinance rates in the future.
Best Mortgage Rates: Where to go
Once you’ve done the first two steps it’s time to shop around in order to choose the broker or bank offering the best mortgage rates. You usually have several choices, all of which it may be worthwhile to check out. This section is designed to give you a head start when it comes to choosing the best mortgage refinance companies.
Best mortgage rates at local banks
Local banks including where you do your regular banking sometimes offer the best mortgage refinance rates, especially if you’ve been a loyal customer. Check with them to see if they can do better than their own or even others’ advertised “best home loan rates” because in some cases they will do even better. The advantage of local banks with all other things being equal is that you can get in person customer service and the closing process may be quite smooth because it too can be in person. Local banks may not always have the best mortgage refinance rates, but when they do, or even when they are very close, they can be a great choice. Bank refinancing rates are often more stable than those offered by third parties that aggregate things from many different banks.
Best mortgage refinance rates and your current provider
Your current mortgage provider may offer not only your best mortgage refinance rates, but also lower costs since you are their current customer and they may have to do less work to process your refi. And of course they want to keep you as a customer so they may be willing to go lower than what they have advertised. It is always a good step to call your current provider when you have found a good rate somewhere else. Give them a chance to match that offer. In some cases they will even beat the best mortgage rates that they are advertising in order to keep a current loan. And your current provider can likely make the closing process easy.
Best refinance rates online
Online banks and brokers are also worth checking out, since they do often have the best mortgage refinance rates, but you have to be quite careful to make sure they have a good reputation and also carefully assess any costs they might charge. Often the latter can make the difference in interest rate not as worthwhile. Look for independent reviews of online providers who are offering the best mortgage rates, both reviews of the company and the specific broker you will be working with. They may appear to be offering the best home loan rates but look to see what their reputation is for closing on time, being responsive, and truly getting people the advertised rate.
Best Home Loan Rates and credit unions
Finally, it may be worthwhile to check out local credit unions that you can join, since they often offer some of the best mortgage rates to their own customers. Credit Unions that are local may allow you to join for relatively little, and there may be national options that you qualify for as well. For many, credit unions are often overlooked but could be the best mortgage refinance companies for their members. Keep in mind that you may not have to be a member of the credit union to get the best mortgage rates they offer. Often you can make a small deposit and become a member in order to get their best home loan rates. Of course in some cases you have to work for a certain employer or have a certain background. Like bank refinancing rates, the best home loan rates at credit unions tend to be stable over time.
What is the best mortgage company for you? That is a question that is very hard to answer, given that the fit between your needs and the terms of each mortgage may be different than others. That said, if you find the best mortgage refinance rates at each of the options above you will likely be able to choose among them.
Best Refinance Rates Conclusion
It is not difficult to get the best refinancing rates available at any given time, though of course knowing if that is the optimal time to refinance in the first place can be the bigger challenge. We hope that the information on this page is helpful at the point where you’ve decided to refi and want the lowest rate.
Bankrate does a nice job of explaining when to refinance a mortgage loan to get the best mortgage refinance rates, and Zillow’s marketplace can help you see a lot of choices for home refi rates. Forbes goes over an alternative involving having your current lender work with you to get the best rate.
Make sure to do your homework by understanding the overall market, knowing the terms that you can get that will increase your chances of ending up with the best home loan rate, and then who to refinance with and you’ll likely be happy with your rate. Be careful not to wait too long for the best possible rate and instead act when the rates are favorable and reduce your chances of having rates go up unexpectedly while you were waiting for that last eighth of a point drop.
Our Get the Lowest Rate page goes into more detail about how to set yourself up to be able to get the lowest rate after you find it, and you may also want to see our “How to Refinance” page shows you how to refinance a mortgage loan.
While we will not promote any particular broker or bank even if they do appear to have the best mortgage rates, we do accept guest comments about the general topic of best home loan rates as long as they are not self promoting and have no affiliate links. We also hope to get our readers’ feedback about the best mortgage refinance rates, so please use our comments section to let us and our readers know how you got the best refinance rates.