Mortgage Refinance Rates Today: December 17, 2024 Update

Let’s talk about mortgage refinance rates today, December 17, 2024. If you’re thinking about refinancing your home, it’s a really smart move to keep an eye on these rates. The quick answer is that, right now, the average 30-year fixed refinance rate is sitting around 6.74%, while the 15-year fixed rate is about 6.15%. But of course, it’s not that simple, so let’s dive into the details and see what this all really means for you.

Bạn đang xem: Mortgage Refinance Rates Today: December 17, 2024 Update

Mortgage Refinance Rates Today: December 17, 2024 Update

Why Do Refinance Rates Matter Anyway?

Refinancing your mortgage basically means taking out a new loan to replace your old one. This can be a game-changer if you’re looking to lower your monthly payments, shorten your loan term, or even tap into some of the equity you’ve built up in your home. Knowing what the current refinance rates are is crucial because they directly impact how much you’ll pay each month and over the life of your loan.

I’ve been following the housing market pretty closely for a while now, and I’ve seen how much these rates can bounce around. What seems like a small difference in percentage points can actually make a huge difference in your budget over time. So, let’s get into it.

What Are Today’s Mortgage Refinance Rates?

Alright, let’s get down to brass tacks. As of today, December 17, 2024, here’s what the average national mortgage refinance rates look like, according to data from Zillow:

• 30-Year Fixed: 6.74%
• 15-Year Fixed: 6.15%
• 5/1 ARM: 5.91%
• 7/1 ARM: 6.56%
• 30-Year VA: 5.84%
• 15-Year VA: 5.69%
• 5/1 VA: 5.33%

Keep in mind, these are just averages. The rate you’ll personally get depends on a bunch of factors (which we’ll get into shortly). But these numbers give you a solid starting point for understanding where the market is right now.

How These Rates Are Determined – The Nitty Gritty

It’s not magic that decides these rates. They are influenced by several factors, and understanding them can help you see why they change. Here are the big ones:

• Economic Conditions: The overall health of the economy is a huge player. Things like inflation, how the economy is growing, and unemployment numbers all play a role. If the economy is booming, rates might rise as more people are looking to borrow money. But if things are slowing down, the opposite can happen to try and stimulate borrowing.
• Federal Reserve Policies: The Federal Reserve, or “the Fed,” has a lot of say when it comes to interest rates. They control the federal funds rate, which is the rate that banks charge each other for borrowing money overnight. This rate doesn’t directly translate to mortgage rates, but it influences the entire interest rate environment, basically guiding how lenders set their rates. When the Fed lowers rates, it can push down mortgage rates too, making refinancing more appealing.
• Your Credit Score: This is a biggie and something you can directly influence! Lenders see your credit score as a measure of how likely you are to pay back your loan. A higher score shows them you’re reliable and they’re likely to give you a better interest rate. I’ve personally seen a big difference in rates I’ve been offered when I improved my own credit history.
• Loan-to-Value (LTV) Ratio: This compares how much you owe on your mortgage to the value of your home. If you’ve paid off a good chunk of your mortgage and have a high equity position, then lenders see you as less of a risk. This can lead to more favorable refinance terms.

Understanding Fixed-Rate and Adjustable-Rate Mortgages (ARMs)

When you refinance, you’ll also need to pick between a fixed-rate or an adjustable-rate mortgage (ARM). Each type has upsides and downsides, so it’s a good idea to weigh your options.

Xem thêm : Mortgage and refinance rates today, December 30, 2024: Rates remain elevated

Fixed-Rate Mortgages

• Stability is Key: With a fixed-rate mortgage, your interest rate is locked in for the entire loan term. This means that no matter what happens in the market, your monthly payment will stay consistent.
• Long-Term Ownership: If you plan on staying in your home for many years to come, a fixed-rate mortgage can give you that piece of mind that your payments won’t shoot up. You will know exactly what you will pay each month.

Adjustable-Rate Mortgages (ARMs)

• Lower Start Rates: ARMs usually start with lower interest rates than fixed-rate loans, which can save you some money initially.
• Rate Adjustments: The catch is that these lower rates are not permanent. After a certain period (for example, 5 or 7 years), your interest rate will adjust based on how the market is doing. This can be great if rates drop, but not so much if they go up. This can make long-term budgeting tricky.
• Risk/Reward: If you think you might move or refinance again within the next few years, an ARM might be a smart play to take advantage of the initial lower rates. But if you plan to stay put, it is better to err on the side of safety with a fixed-rate mortgage.

How Refinancing Can Actually Impact Your Financial Situation – An Example

Let’s see this in action with a practical example. Imagine you’re refinancing a $300,000 mortgage, we’ll look at a 30-year and a 15-year fixed option:

30-Year Fixed Mortgage

• Interest Rate: 6.74%
• Monthly Payment: About $1,948
• Total Interest Paid Over 30 Years: Around $420,097

15-Year Fixed Mortgage

• Interest Rate: 6.15%
• Monthly Payment: About $2,572
• Total Interest Paid Over 15 Years: Around $129,578

As you can see, the 15-year mortgage has a higher monthly payment, but you will save a HUGE amount of money in interest over the life of the loan. This illustrates the choice homeowners have – lower monthly payments but more interest or higher monthly payments with a lot less interest in the long run.

When Is the Right Time To Refinance?

Deciding to refinance your mortgage is a big decision, and it goes beyond just looking at interest rates. Here’s when it might make sense to take the plunge:

• Rates Are Down: If mortgage rates have dropped since you got your original loan, it’s a no-brainer to check out refinance options. It’s an opportunity to potentially lower your monthly payments.
• Your Finances Have Improved: If your credit score has improved or your income has gone up since your original loan, lenders might offer you better terms.
• You’ve Built Equity: If you have increased the equity of your home by paying down your loan, you could get better rates on a refinance loan.
• You Have a New Financial Strategy: If you’ve changed your financial goals, for example now want to pay off your mortgage quicker, you may want to refinance to align with your new goals.

How Does the Federal Reserve Affect Mortgage Rates?

The Fed is kind of like the conductor of the economy’s orchestra, and their actions have big implications for interest rates, including mortgage rates.

• The Fed’s Decisions: When the Fed adjusts the federal funds rate, it doesn’t automatically change mortgage rates. But it influences the overall interest rate environment. This means that mortgage rates usually follow the trend. If the Fed lowers rates, mortgage rates tend to decrease too, making refinancing more appealing.
• Expectations Matter: Economists are always trying to predict what the Fed will do next. And these expectations alone can move rates! So, if you want to get a grasp of what mortgage rates might do, keeping track of the Fed is a good idea.
• Market Reactions: The words of the Fed Chair can also make markets move. So, any communication from the Fed is important when thinking about mortgage rates.

What Might Happen With Mortgage Rates in the Future?

Xem thêm : Mortgage groups push FHA for loss mitigation extension

Trying to predict the future is tricky, but here’s what we can say about where mortgage rates might be headed:

• Economic Uncertainty: With inflation always looming and the Fed trying to get it under control, it’s hard to say for sure what will happen. Rates have been very up and down recently, that is for sure.
• Potential Stability: Some economists think that as we move into 2025, rates may stabilize or even decrease if the economy shows signs of cooling down.
• Stay Informed: It’s super important to stay informed and keep up with the economic news to see where things are headed. Don’t just set it and forget it – check up regularly on the rates.

Key Things To Think About Before You Refinance

Before you jump into refinancing, make sure to think about these points:

• Refinancing Costs: It usually costs money to refinance. We are talking about closing costs that can be as much as 2% to 5% of your loan amount. So, you want to make sure the savings you will get make up for these costs.
• Time In Your Home: How long do you plan to live in your current home? If you are planning on moving soon, then it might not be worth it to go through the hassle of refinancing if you won’t have time to recoup the closing costs.
• Your Current Loan: Take a good look at your current loan. If you already have a low rate or have some big fees for paying off your loan early, then refinancing might not be for you.

Wrapping It Up

Refinancing your mortgage can be a great move to lower your payments, save on interest, or tap into your home’s equity. As of today, December 17, 2024, mortgage refinance rates are averaging around 6.74% for a 30-year fixed mortgage. It’s super important to keep an eye on what the Fed is doing, what is going on with the overall economy, and of course, your own personal finances.

By staying in the know about current rates, different mortgage options, and your own situation, you will be armed with everything you need to make the best choice for your refinancing needs. Whether your goal is to save on your monthly payment or to do something else, doing your homework is key!