How Low Will Mortgage Rates Go?

For the last several weeks, it seems as though the mortgage rates are playing a game of limbo...and winning. Every time you look at the most current mortgage rates for fixed rate loans, they have dropped below the historic lows that they were already at.

According to Freddie Mac, one of the leading companies that tracks mortgage rates, you can get a mortgage loan for 4.54 percent right now if you qualify. That means that if you have great credit, a good income and at least 20 percent to put down on your home, you may be able to get this historically low rate on a 30-year fixed rate mortgage. That rate is down about 0.02 percent from last week’s ending rate and down from the 5.25 percent rate that they were at one year ago.

If you are looking for an even lower rate, a 15-year fixed mortgage is at 4 percent for qualified buyers. That’s a 0.03 percent drop from last week’s rates and it’s a 0.69 percent drop from the rates from one year ago.

While these rates are super low, these aren’t the lowest rates you can get. If you shop around and you are a qualified home buyer, you may be able to find rates even lower than those if you are willing to check with various mortgage lenders before making your purchase. However, because of the recent mortgage problems we’ve had in the United States, lenders are being much more careful about who they loan money to. Freddie Mac and Fannie Mae have tightened the restrictions surrounding the types of loans they will purchase and guarantee. This means that mortgage lenders have to tighten their standards as well.

This means that you may not be able to qualify for these low rates even if you have had a mortgage for years and you are looking to refinance. Self-employed homeowners wishing to refinance so they can make home improvements are getting turned down for the best rates even though they have a good track record of payments. Many lenders are not offering premium loans and rates to the self-employed because they pose a higher risk than the homeowners and home buyers who have traditional jobs.

So as rates continue to drop, the question must be asked: How low are they really going to go? There was a time just a couple months ago when we thought mortgage rates wouldn’t go back down for a while. Now they are at their lowest levels yet and they have dropped for six straight weeks. How much lower do you think they can get?