It’s been months since coronavirus hit the U.S. — and mortgage and refinance rates are still declining. Mortgage rates are subject to change based on housing market conditions, location, personal finance (such as your credit score), and lender. But if you’re looking at U.S. market data as a whole, now is a good time to get a mortgage or a mortgage refinance.
Here’s what you need to know about mortgage and refinance rates today, your loan options, and how you can capitalize on lower interest rates and save money.
Today’s mortgage and refinance rates
So far, in 2020, mortgage interest rates have plummeted to record lows nine times, and that number is likely to grow. At publication, Freddie Mac reported these average interest rates:
Current mortgage rates, as of October 1, 2020:
- 30-year fixed-rate mortgage: 2.88% (up 0.02% from the record-low rate of 2.86% set on Sept.10)
- 15-year fixed-rate mortgage: 2.36% (a 0.78% decrease from the year prior)
To lock in a low mortgage rate, head to Credible. You can see if you qualify for an instant pre-approval letter without any impact on your credit score. Bonus: You can do it all online.
If you already own a home, then you may instead want to refinance your mortgage. Having a full picture that includes costs and savings can help you decide. You can compare current mortgage refi lenders and save on interest by filling out your information here.
Will mortgage rates keep going down?
In March, the Federal Reserve dropped its interest rate to help protect the U.S. economy against the effects of coronavirus. Mortgage rates could continue to drop as new cases of the coronavirus flare up in communities and as lenders try to encourage more spending.
On September 16, the Federal Reserve voted to leave interest rates between 0% to 0.25% until at least 2023. Further, the Federal Open Market Committee released an updated economic projection sheet that indicates interest rates could remain closer to zero through 2023.
3 ways take advantage of today’s low interest rates
There are several ways you can take advantage of the lower interest rates to save money.
As you consider each option, use Credible to compare mortgages and lenders in one place. Choosing the right lender can help make your experience much more comfortable.
Here are a few ways you could take advantage of a rate drop:
- Refinancing your mortgage
- Switching mortgage lenders
- Locking in a low mortgage rate
1. Refinancing your mortgage
If you’re a homeowner, you could save money when you refinance your mortgage. You may be able to reduce your mortgage interest rate with a refinance. Refinancing your loan could save you on your monthly mortgage payment and help reduce the overall cost of your loan.
If you don’t know where to start with sizing up today’s mortgage rates, turn to a financial website. You can browse the best refinance rates and choose the loan type that fits your needs.
If you’re considering a mortgage refinance or evaluating loan options, you’ll need an online mortgage refinance calculator. Consider the cost of your refinance, the amount you’ll save per month, and how long it will take you to recoup the money you put into your refinance. Using a mortgage refinance calculator should tell you if you’re saving money by refinancing. (Note: You may have a harder time getting approved for refinance loans with bad credit).
However, it’s important to note the Federal Reserve recently announced they’d begin charging a flat 0.5% refinance fee on all refinance loans. The Market Condition Credit Fee was initially slated to begin September 1, but the Fed pushed back the refinance fee start date until December 1. If you refinance a $250,000 mortgage loan, the new fee adds $1,250 to your loan.
In addition to the new Market Condition Credit Fee, refinances also include loan origination fees and closing costs. Ideally, you should aim to reduce your interest rate by at least 1% for refinance loans to pay off.
2. Switching mortgage lenders
You may be able to score a better deal by switching mortgage lenders (especially while interest rates reach record lows). Whether you’re in the process of purchasing a home or already have a home loan, considering a different mortgage lender may be a good option.
- There are multiple reasons to consider a new mortgage lender, including:
- Lower monthly mortgage payments
- Lower interest rates
- Better communication.
If you’re a first-time homebuyer, you’ll definitely want to check out current mortgage rates and research market data to determine which loan type and lender is right for you. All potential home buyers can benefit from using Credible’s tools and reading the latest mortgage news.
3. Locking in a low mortgage rate
Interest rates change regularly, sometimes daily. If you are getting a mortgage loan, you may want to consider locking in your mortgage rate. When you lock in a mortgage rate, the interest rate cannot change so long as you close your home loan within a set period (typically between 30 and 60 days). While your interest rate cannot go up during a loan lock, it also cannot go down. So, if rates drop further, you could miss out on a lower rate.
Some situations could affect your mortgage rate even after a mortgage rate lock, including a change in your credit score, a change in the loan amount or loan type, or a higher or lower appraisal than expected.
If you’re financially ready, but on the fence about purchasing a home, now is a great time to get serious about buying a property. You could save thousands of dollars by taking advantage of lower interest rates — click here to browse refinance loans or beyond.
For example, if you took out a 30-year fixed-rate home loan at 4% for $300,000, your monthly payment should be about $1,432 per month. The total cost of your loan over 30 years is $515,069 ($215,069) in interest). The same loan with a 2.87% interest rate would have a monthly payment of $1,260 and cost $453,587 ($153,587).
If you can afford it, now is a great time to consider purchasing a home or refinancing your mortgage. Since the new Market Condition Credit Fee won’t apply until December 1, you can maximize your savings by applying for a loan, or a refinance sooner rather than later.
If you have more questions about mortgages or personal finance in general, consider reaching out to a financial advisor — or connect to a loan officer via Credible to get your questions answered.
‘There is no new normal’: Worcester small business owner pivoted during COVID-19 and expects only more change after pandemic
It took about eight minutes for the bank to reject Natalie Rodriguez’s application for a loan through the Small Business Administration.
Rodriguez opened Nuestra, a Puerto Rican inspired restaurant in Worcester, in January of 2020. When COVID-19 arrived months later she discovered Nuestra wasn’t eligible for the federal or state funding that thousands of other establishments received.
To qualify, restaurants were required to show payroll and salary for years before 2020. Those figures didn’t exist for a restaurant that weren’t open in 2019.
“[I was] determined and knew that ‘no’ is not an OK answer,” Rodriguez said. “A door may close but you may need to kick down another door.”
Rodriguez then applied for conventional loans only to be led to more closed doors. Less than 10 minutes after applying for an Economic Injury Disaster Loan, she received notice that her poor credit score resulted in her application being denied.
Rodriguez used the dead end with the SBA to create a new path for herself and Nuestra.
She not only learned how to improve her credit but wanted to ensure others didn’t have to follow her journey as an entrepreneur.
Rodriguez extended the “Nuestra” brand to include financial advising. She started Nuestra Financial in April of 2020.
“Now I’m helping others. I’ve been able to restore my credit,” Rodriguez said. “I’ve been able to help others restore their credit and be able to help them make a business themselves if they so choose. I’ve been able to survive.”
Without grants and other funding, Rodriguez managed to keep her restaurant open through funds generated from Nuestra Financial.
“I was very quiet about it in the beginning. I didn’t want people to be like, ‘Oh look at this girl, she just opened a restaurant in the middle of a pandemic,’ and talk smack,” Rodriguez said. “About a month or two later, a light bulb hit and I was like, nobody pays my bills but me. I needed to mind my own business and not worry about what other people thought.”
In creating Nuestra Financial, Rodriguez said she’s helped Worcester residents restore their credit and purchase new vehicles and homes.
Rodriguez said financial literacy is rarely taught to children in school and wasn’t something she learned. When a situation arises like a rejection notice for an economic disaster loan, many don’t know how to respond or where to find answers.
Rodriguez said she’s helped young and old people, along with those who have bad credit or no credit.
“We lack the confidence, including myself, because we weren’t taught,” Rodriguez said. “So if you don’t know something, you weren’t taught, you’re not going to be confident about it.”
Coming out of the pandemic, Rodriguez remains confident about both her businesses. Nuestra, the restaurant, while closed for daily service continues to provide catering services. Rodriguez is still preparing what the future holds for the restaurant but plans to announce an update soon.
As masks start to become less a part of daily routines, Rodriguez, as a small business owner, doesn’t envision many differences from this year to last.
So many aspects of life remain uncertain from rising food costs to a potential third booster for vaccines and whether the country will ever reach herd immunity for COVID-19.
The pandemic arrived with Rodriguez immediately pivoting. As it approaches its potential end, Rodriguez will continue to do what helped her to navigate it.
“I feel like there is no new normal just yet,” Rodriguez said. “I think we’re all just trying to adjust and pivot at the same time and getting creative. I think it’s where we all are.”
Columbus Mattress Wholesale moves to newer, larger Gahanna store
More than four years back, Cathryn Clark’s boyfriend, Christopher Robbins, was on the hunt for a new mattress. He just couldn’t find one at an affordable price.
Clark, 29, and Robbins, 34, who are now engaged, were living in Franklinton, where they still live today.
They had no experience owning or operating a small business; Robbins worked as a retail assistant for SAS Retail Services while Clark worked as the communications director for two Methodist churches.
But in 2017, Robbins, with Clark at his side, took the leap and opened Columbus Mattress Wholesale on the West Side, with the goal of helping low-income consumers secure mattresses and other bedtime products.
“We really wanted to bring a store to people that, you know, they weren’t paying an arm and leg, but they still could get a good night’s sleep,” Clark said.
Customers at Columbus Mattress Wholesale can pay cash or credit, for example, but the business also works with financing companies that serve people without credit scores, with bad credit or who are lower income.
Last month, the business made a big move. It expanded from its original location on Harrisburg Pike to a store double the size at 435 Agler Road in Gahanna.
Clark said she and Robbins saw a need in the broader area, with many of their customers coming from outside the Hilltop, such as Linden.
Nestled between Dollar Tree and the Ohio BMV in Gahanna, the new storefront opened Memorial Day weekend and sells mattresses, bed bases, bed frames and pillows. Mattress prices range from under $100 to more than $1,000, depending on the size and brand, which includes some well-known names such as Serta, Beautyrest and Casper.
Clark said while she and Robbins originally sold solely Ohio-based brands, they’ve branched out to national brands as business has grown.
Columbus Mattress Wholesale also offers free same-day delivery on most orders from customers living in Columbus.
Clark does a little bit of everything for the business, from running communications, to working on the sales floor, to managing the sales team, to ordering what they sell.
She said a big mission for herself and Robbins, beyond doing business, is aiding the community.
“We’ve seen a lot of people struggle,” Clark said.
Clark said she and Robbins work to mentor other people who are hoping to open or currently own a small business. She added that the store starts employees at $17 per hour.
She and Robbins haven’t decided yet what they will do with the original location — which is currently closed — but said they might shift it into an accessory store.
A Guide to Getting Mobile Deals with Bad Credit History
You’re interested in a new mobile deal but there’s only one thing that’s stopping; you’ve got a bad credit history. Does that mean that your hopes of getting a new phone contract are crushed? Well, not exactly. In this article, you will learn how to get a mobile phone with no credit check required and how you can navigate the issue to get a great deal even with bad credit history.
Why is a bad credit history a big deal?
When taking a new phone contract, it means you’re entering into a financial agreement that requires you to make payments in monthly installments. As such, many providers of the service will want to ensure that they’re entering into an agreement with someone who will pay the agreed amount without violating the terms.
The best way for them to have that assurance is by looking into the credit history of the client. But does it necessarily mean that if you’ve got a bad credit history you can’t honor your side of the bargain in a phone contract? Of course not; which is why this article gives you the options you can pursue to end up landing a pretty impressive deal.
Although you might not find a deal that includes the latest devices in the market, you’ll not lack a relatively cheaper but functional option. For instance, if you’re a great fan of the iPhone, you might end up landing the iPhone XR instead of the latest release of iPhone 12. When the deal is cheaper, you stand higher chances of success as opposed to one that just dropped in the market and so it’s in high demand.
Another alternative is to find a contract that comes with a used handset as such tend to be less strict in terms of credit history requirements. That means you’re likely to pass the test of a contract with an already used gadget as opposed to that of a brand new phone.
Another alternative could be to go for SIM only deals especially if you already have an alternative source for a handset. Most of the providers won’t require you to sign any contract and so they’ll not look into your previous credit history. SIM only deals tend to be intensive on minutes, texts and data offers.
Networks that favor people with bad credit
There are networks that are more lenient to people with bad credit history than others. Major networks including Vodafone, O2 and EE usually come with strict requirements that might only frustrate you. The following are the alternatives you could consider looking into:
Smarty:The company offers SIM only plans that don’t require you to sign any contract. If you have an alternative handset, this could be a great alternative to consider as they won’t do a credit check on you. Their services and offers run on a monthly rolling basis which means you can walk away at any time in case you’re dissatisfied with the quality of service you’re getting. Their deals start at 2GB of data and unlimited texts and calls at a cost of £5 to unlimited calls, texts and data for £16.
Giffgaff:You won’t be subjected to a credit test here as well during sign up for one of the packages that the network offers. You’ll be required to sign up for a monthly bundle of your choice that’s inclusive of calls, data and texts. You can proceed with the same plan or switch to a new one after the month is gone. Most of their deals start at £8 a month.
VOXI:The network has numerous offers that operate on a 30-day rolling basis. They also won’t bother performing a credit check on you as it has no use in the first place. A bonus with this network is that they won’t include the social sites you frequent in their data charges.
Mobile phone to go with a SIM only deal
The SIM only deals we’ve highlighted above means that you’ll need to have a separate handset. In case you don’t have one already, you can take a separate mobile phone contract to go with your preferred SIM only deal. The other alternative is to buy one outright. But in case you don’t have money to make the purchase, you can always save up and buy when you’ve accumulated enough.
Some great smartphones that are classic and yet won’t put a huge wall in your pocket. Coveted brands such as iPhone and Samsung have great devices such as the Samsung Galaxy A52 5G that goes for £349 and the iPhone SE valued at £399. As you can see, with some savings, you should be able to get your hands on these gadgets and many others out there. And if you feel that these cost on the higher side, you can opt for refurbished phones. Refurbished phones refer to those handsets that have been used but have undergone intensive testing to ensure they still have got higher functionality.
When do credit checks apply?
Credit history is required by providers that have a mobile phone that requires a payment plan spanning several months or years. In most cases, the major network providers including EE, O2 and Vodafone will do a background check on your credit check before allowing you to sign up for their deals. Some factors that might make you have a poor credit rating is when you’ve missed several months’ payments, made late payments or placed too many credit applications concurrently.
Want to improve your credit rating?
The following are several steps you could consider to help you improve your credit rating. Most of these revolve around efficient management of your money, bills and other forms of payments.
- Have a proper and functional bank account
- Pay all your outgoing bills on or before the due dates
- Ensure you’re registered on the electoral roll
- Don’t share your account with a person with poor credit rating
That’s how you can work out things to get mobile deals even if your credit history isn’t a good one. But going forward, the best action plan would be to work towards improving your credit rating so that you can take advantage of the opportunities that come up in future.
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