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30-Yr fixed 4.750 % 0.7 to 1
15-Yr fixed 3.750 % 0.7 to 1
5/1 ARM 3.125 % 0.7 to 1
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Will Mortgage Rates Continue To Fall?

While the poor economy has led many people to have to deal with a variety of financial difficulties, one thing that has actually benefited many people is that mortgage rates have continued to remain very low. For people that have a high interest rate on their mortgage, refinancing into a new mortgage to take advantage of the historically low rates could be a great way to save a considerable amount of money. In fact, many people who do end up refinancing their mortgages end up saving hundreds of dollars per month in excess interest charges.

While current mortgage interest rates are extremely low today, people looking to take advantage of the low rates have a considerable amount of hurdles that they have to get through in order to qualify for the low rates. One of the most difficult challenges for people looking to refinance their mortgage is having enough equity in their homes to qualify for a refinance. To qualify for a refinanced mortgage with a new mortgage lender, most people will need at least 10% equity in order to qualify for the low current mortgage interest rates. Since housing prices across the country have fallen so much, having this much equity after receiving a new appraisal could require the borrower to put forth a very significant down payment.

For those looking to take advantage of the low current mortgage rates, having a good credit score is also a necessity. During the sub-prime lending era, many banks were willing to give mortgages to people even if they had a less than good credit score. Since then, many of the borrowers with poor credit scores have ended up defaulting on their loans. Because of this, banks now require that their borrowers have a credit score of 740 or higher in order to qualify for the low current mortgage interest rates. Those who have a slightly lower score may still qualify for a loan, but they will normally have to pay either higher origination fees or they will be charged a slightly higher interest rate.

To qualify for the low current mortgage rates, a borrower will also be able to financially afford the mortgage payments. Banks today use a variety of debt to income ratios, which test whether the borrower’s total housing payment is something that they could afford to make on a regular basis.