Today’s mortgage and refinance rates: June 2, 2021

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Mortgage and refinance rates have remained mixed in general since last week. Many have remained relatively steady or have increased slightly. However, rates remain at historic lows overall. 

If you’re aiming to buy a home or refinance, you may think about going for a fixed-rate mortgage instead of an adjustable-rate mortgage. These days, ARM rates start higher than fixed rates, and there’s the possibility of a rate increase in the future.

In general, rates are still at striking lows. Low rates frequently signify a struggling economy. As the US continues to face the economic impact of the COVID-19 pandemic, rates will likely stay reasonably low. 

Conventional rates from Money.com; government-backed rates from RedVentures.

Learn more and get offers from multiple lenders »

The 7/1 ARM rate is the only mortgage rate above 4%, so it might be a great opportunity to secure a low rate. 

Rates for conventional mortgages, which you might think of as “standard mortgages,” are currently low. But you can frequently get an even better rate with a government-backed mortgage through the FHA or VA, depending on which term length you’re after. Government mortgages are good options if you’re eligible.

Conventional rates from Money.com; government-backed rates from RedVentures.

Compare offers from refinancing lenders »

You can get a rate below 3% on a 15-year fixed mortgage or government-backed mortgage if you’re aiming to refinance.

Mortgage rates are at all-time lows, so it could be a good day to lock in a rate — especially if you know you want to buy soon.

But rates will probably stay low for a while. So you don’t necessarily need to rush to take advantage of low rates if you aren’t quite ready yet. You have time to boost your financial profile, which could help you get an even better rate.

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

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

You can secure a low rate now if your finances are in good shape, but you don’t need to rush to get a mortgage or refinance if you’re not prepared.

Mortgage rate trends

Mortgage rates have fluctuated since last week,  while rates for government-backed loans have stayed the same. Only 10/1 ARM rates have changed by more than five basis points. 

Refinance rate trends

Since last Wednesday, refinance rates on fixed and adjustable mortgages have lvaried. However, rates on government-backed mortgages have changed by only a single 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 remain the same the entire time.

You’ll fork over higher monthly payments with a 15-year term than a longer term because you’re paying off the same loan principal 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 you’ll pay off your mortgage in a shorter amount of time. 

With a 30-year fixed mortgage, you’ll pay down your mortgage over three decades, and your interest rate will remain 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’m dividing up my payments over more years.

Your total interest payments will be higher with a 30-year term than a shorter term because the 30-year term will come with a higher interest rate for a longer amount of time. 

An adjustable-rate mortgage, frequently referred to as an ARM, will secure your rate for a set amount 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 per year. 

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

If you’re thinking about getting an ARM, ask your lender what your rates would be if you chose a fixed-rate versus an adjustable-rate mortgage.

Along with conventional mortgage rates, we’ve provided rates for FHA and VA mortgages, which are two types of government-backed home loans.

Government mortgages are backed by federal agencies. They’re less risky for lenders, because the agency compensates the lender if you default on payments. Because they’re lower-risk, lenders charge lower rates on government-backed loans than on conventional loans.

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

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

  • FHA mortgage: This type of loan isn’t limited to a certain type of person, so it’s the most common government mortgage. It’s particularly useful if your credit score isn’t high enough to get a conventional mortgage.
  • VA mortgage: You may be eligible if you’re an active military member or veteran.
  • USDA mortgage: You might qualify if you live in a rural area and earn a low to moderate income.

Mortgage and refinance rates by state

Check the latest rates in 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
South Carolina
South Dakota
Tennessee
Utah
Vermont
Virginia
Washington
Washington DC
West Virginia
Wisconsin
Wyoming

About the authors

Laura Grace Tarpley is an editor at Personal Finance Insider, covering mortgages, refinancing, and lending. She is also a Certified Educator in Personal Finance (CEPF). Over her five years of covering personal finance, she has written extensively about ways to navigate loans.

Ryan Wangman is a reviews fellow at Personal Finance Insider reporting on mortgages, refinancing, bank accounts, bank reviews, and loans. In his past experience writing about personal finance, he has written about credit scores, financial literacy, and homeownership.

Best Mortgage Rates Today: Wednesday June 2, 2021

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