Refinance Mortgage Rates
For those qualified individuals seeking to refinance their mortgages, the good news is that mortgage rates have dropped to yet another record low. As of June 24, 2010, reported rates among a large survey of lenders for 30 year fixed rate mortgages fell to 4.81 per cent. The rate for the previous two weeks was 4.88 per cent which had been the prior reported record low.
The last time mortgage rates were reported at such a record low was back in June and July of 1956 at 4.81 per cent and 4.78 per cent in May of that year.
Prior current recent lows are a reported 5.8 per cent mortgage rate one year ago while four weeks ago, the modern day record low was 4.92 per cent.
The 15 year fixed rate mortgage now stands at 4.26 per cent with the 5/1 adjustable rate mortgage (ARM) at 4.13 per cent and the jumbo 30 year fixed loan rate at 5.63 per cent.
Even though mortgage rates are so historically low, fewer people are now applying for home loans. Industry experts report that most homeowners who are qualified to refinance have already done so.
Many borrowers are concerned that banks are very tight with money nowadays and that mortgages are hard to come by.
Several years ago, receiving approval for a mortgage loan was much easier. At that time, all that was needed was a FICO credit score of approximately 640 or more. A ten per cent down payment would be sufficient for the borrower to receive an automatic computer generated loan approval. Very little documentation was needed.
In our current economic climate, a great deal of documentation is required by the lending institution. Prospective borrowers and homeowners must be able to prove financial stability and that they can make mortgage loan payments in a timely manner. A FICO score of at least 700 is required.
Mortgage rates offered by a large national bank:
| Rate | APR | |
|---|---|---|
| 30 year fixed | 4.375% | 4.707% |
| 15 year fixed | 3.875% | 4.566% |
| 5 year ARM | 3.250% | 3.776% |
| 3 year ARM | 3.500% | 3.807% |
| FHA | Rate | APR |
|---|---|---|
| 30 year fixed | 4.750% | 5.241% |
| 15 year fixed | 4.250% | 4.778% |
| 5 year ARM | 4.250% | 3.627% |
| 3 year ARM | 3.750% | 3.269% |
Mortgage brokers have reported that they carefully scrutinize documents received by homeowners and discuss their financial information in great detail. While they cannot predict a positive outcome and approval of mortgage refinancing from the lending institution – regardless of how favorable a borrower’s documentation and appearance of financial stability – the brokers want to be as reasonably assured as possible that all eventualities have been covered and the homeowner’s loan application is complete so that there is more of a probability that the borrower will qualify.