Mortgage companies have flipped the switch and their commercials seem to be dominating the airwaves once again. With the rates sitting around 5%, there are reasons to cheer, but the reality is refinancing is now a whole different ball game.
Rates are at 40 year lows, but qualifying for that rate can be a real problem. Unlike during the refinance boom, when all you needed was a paycheck stub and a heartbeat, today's mortgage process is more difficult. Lending guidelines are stricter today since banks are still dealing with foreclosures tying up their capital.
At the current time, to qualify for the best rate, you will need a credit score of 720 and 20% equity or more. This applies to single family residences that are owner occupied (you live there). You can also "buy" down your rate by paying a discount point, which equals 1% of your loan. Paying a discount point usually lowers your rate by 0.25%.
You would be smart to contact your local credit union, bank and trust mortgage broker. The credit union and bank will typically work off of specific in house guidelines, while the mortgage broker may be able to locate you the best rate/fee combination for your situation. Mortgage brokers typically work with multiple lenders.
If you are successful in refinancing, you may capture the lowest rate of your lifetime.
Wishing You Wealth in all its Greatest Forms,
Alex
1 comment:
Good information Alex. I am still trying to get a home loan for the house of my dreams. I will keep you posted
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