The most-recent survey from Freddie Mac shows interest rates on 30-year, fixed-rate mortgages averaged around 5 percent last week, the lowest level in 37 years. While lower interest rates have resulted in a dramatic jump in homeowners seeking to refinance, now also is a great time to purchase a home. The lower interest rates also are making mortgage payments more affordable, especially on larger homes that previously may have been out of reach. In addition to lower monthly mortgage payments, a lower interest rate also allows more home buyers to qualify for larger mortgages with less income.
The biggest problem borrowers are running into is that it is so much more difficult to qualify. On a refi, if equity has dropped to less than 20% of the property's value, the borrower is out of luck. For home buyers, lenders are asking for a minimum of 20% down, and often want even more than that. They are also looking for borrowers with credit scores of 720 or higher, and very little debt.
Sure, there are still loans out there for those who don't meet these criteria, but don't expect the terms to be as good.
1 comment:
Thanks Bobbie for your response. Another question for you: What do you think about refi for an existing jumbo loan into a fixed rate 625.5K and the remaining 100k or so on a HELOC...monthly payments are lower given lower mortgage rates....anything we should watch out for...thoughts?
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