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Mortgage rates are low, can you refinance? |
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Written by Administrator
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Tuesday, 31 March 2009 |
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If you are checking mortgage rates online, trying to refinance or been waiting on low mortgage rates then the time is now. Mortgage rates are at the lowest point ever recorded with Freddie Mac. The move to lower mortgage rates is in an effort to push mortgage refinancing by good to excellent credit homeowners and drive up new home sales. The average rate is the lowest in Freddie Mac's weekly survey dating to 1971. The 30-year fixed-rate mortgage averaged 4.85 percent with an average 0.7 point for the week ending March 26, down from last week when it averaged 4.98 percent. Last year at this time, the 30-year fixed-rate mortgage averaged 5.85 percent. The 30-year fixed-rate has never been lower. So what does this all mean for you as a homeowner? If you have good to excellent credit, home equity, an adjustable rate mortgage or a 30-year fixed mortgage rate above 6% then it may be time to apply for a refinance. Sounds simple, refinance if you have good credit and be locked in for 30 years. Well it is not that easy even for good credit borrowers. Mortgage rates may be at the lowest point in history, but having
good credit is not the only factor that decides a mortgage loan approval. Especially in today's banking environment. The second biggest factor next to credit is income. Do you have enough income to afford your mortgage payment or should we say income you can prove. Refinancing now is not the same as it was during the refinance boom in early 2002. If your credit was strong then proving your income was not as important. Stated income mortgage loans were easily available for self employed borrowers with FICO scores above 700. Homeowners that locked in adjustable rate mortgages with a stated income loan are in a unique situation and may find it hard to refinance out of this situation. Currently there are no stated income products and that is a self employed homeowner's worst nightmare. Many small business owners do not claim the full amount earned during a year or write off a lot of expenses to lower their taxable income. When trying to get financing this can cause an issue where income is a factor. In the past your credit would allow you to just make up what number worked to get financing. If you needed to make 150k per year to get a mortgage then no one was their to stop you. Many homeowners are in this situation and can not refinance to take advantage of the lowest mortgage rates in history.
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