Today’s mortgage and refinance rates: May 25, 2021 | Rates waver

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Mortgage and refinance rates have fluctuated since last Tuesday — some rates have increased, others have decreased, and some have held steady.

The rate shifts aren’t drastic, and you probably don’t have to worry about significant increases anytime soon. Low rates signify a struggling economy. Employment and inflation in the US need to improve for mortgage rates to go up. Marvin Loh, Senior Global Macro Strategist at State Street, told Insider he expects mortgage rates to remain fairly steady until at least fall 2021.

It could be a good day to lock in a low mortgage rate. But if you aren’t ready to buy or refinance yet, you likely have a few more months to take advantage of low rates.

Conventional rates from; government-backed rates from RedVentures.

Learn more and get offers from multiple lenders »

Today, the lowest mortgage rate is the 15-year fixed rate. The highest is the 7/1 ARM rate.

Currently, rates for conventional mortgages, which you may consider “standard mortgages,” are already low. But you can often get an even better rate with a government-backed mortgage through the FHA or VA, depending on which term length you pick. Government mortgages are great options if you qualify.

Conventional rates from; government-backed rates from RedVentures.

Compare offers from refinancing lenders »

Fixed refinance rates are significantly lower than adjustable rates. If you have an ARM, you may want to refinance into a fixed-rate mortgage.

Mortgage rates are at all-time lows. It could be a good day to lock in a rate.

However, you probably won’t see a major rate increase anytime soon, so there’s no need to hurry. Rates will likely stay low for several months, if not longer. You have the chance to improve your financial standing and get a lower rate. 

To obtain the best rate possible, think about these steps before applying:  

  • Boost your credit score by making timely payments, paying down debt, or letting your credit age. You’ll get a better interest rate with a higher score, and a lot of lenders will reduce your rate with a score of at least 700. 
  • Put down more for your down paymentThe smallest down payment required will be contingent on which type of mortgage you want. You’ll likely get a more favorable rate with a higher down payment.
  • Reduce your debt-to-income ratio. Your DTI ratio is the amount you pay toward debts each month, divided by your gross monthly income. To boost your ratio, pay down debts or seek out opportunities to increase your income. 

You can lock in a low rate now if your finances are looking good, but you don’t need to rush to get a mortgage or refinance if you’re not ready. However, keep in mind that homes are selling fast. So if you know you’ll be ready to buy in the next couple of months, you may want to get a set rate soon so you can act quickly when it’s time to buy.

Mortgage rate trends

Some mortgage rates have decreased since last Tuesday, while others have increased or stayed the same. Most mortgage rates are up since this time last month. 

Refinance rate trends

Most refinance rates have gone down a little since last Tuesday. Rates have fluctuated since this time last month.

If you get a 15-year fixed mortgage, you’ll pay the same interest rate over the 15 years it will take you to pay down your loan.

A 15-year term will cost less than a 30-year term. You’ll get a lower interest rate and you’ll pay off your mortgage in half the time. 

However, you’ll make higher monthly payments with a 15-year fixed mortgage than a 30-year fixed mortgage because you’re paying off the same mortgage principal over fewer years.

If you take out a 30-year fixed mortgage, you’ll pay off your loan over three decades, and you’ll secure your interest rate for the entire term. 

You’ll pay less per month with a 30-year fixed mortgage than with a shorter term because you’re dividing up your payments over more years.  

But you’ll pay more in interest with a 30-year term than with a 15-year term, as you’re paying a higher interest rate for an extended period. 

An adjustable-rate mortgage, or ARM, locks in your rate for a predetermined amount of time. Then your rate will increase or decrease periodically. For example, your rate will stay the same for the first 10 years with a 10/1 ARM, then fluctuate once per year.

ARM rates are currently at historic lows, but fixed rates are even lower. It may be a good time to secure a low rate with a fixed mortgage. You also won’t risk your rate increasing in the future, as you would with an ARM.

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

We’re also providing rates for FHA and VA home loans, two kinds of government-backed mortgages.

Government mortgages are backed by government agencies. The government pays the lender if you fail to make mortgage payments.

Government-backed home loans are less risky than conventional mortgages, so lenders have more lenient requirements for your credit score, debt-to-income ratio, or down payment. Government mortgages also come with lower interest rates. These mortgages can be great deals if you qualify. Here are your options:

  • FHA mortgage: FHA loans are mostly for people with lower credit scores. But these mortgages aren’t limited to a certain type of person, like VA and USDA loans.
  • VA mortgage: You may be eligible if you’re an active military member or veteran.
  • USDA mortgage: You could qualify if you live in a rural area and fall under a certain income limit.

Mortgage and refinance rates by state

Check the latest rates in your state at the links below. 

New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Rhode Island
South Carolina
South Dakota
Washington DC
West Virginia

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: Tuesday May 25, 2021

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