In the last year, we’ve seen mortgage rates go up and we’ve seen them drop to all-time lows. Of course, we like to see the rates drop to historic lows, but there aren’t a lot of people who can qualify for those low rates. In fact, it is becoming more difficult than ever to qualify for the low mortgage rates that are available.
Although the rates are starting to increase slightly, 30-year home mortgage rates remain close to historically low levels around 5%. These rates are only available to qualified buyers having a very high credit score as well as a 20 percent down payment. For homeowners who are refinancing their homes, these rates are typically only available to the ones who have at least 20 percent equity built up in their home.
Mortgage rates for a 15-year fixed rate loan are even lower. The average rate for a 15-year fixed rate mortgage is about 4.09 percent, which is up a half of a percentage point over last week’s 4.04 percent.
According to the US Treasury Department, roughly 1/3 of all mortgage applicants are being denied for home loans. An even larger percentage of buyers are behind denied those great advertised mortgage rates that have made the news this year. Unless you have a score that is at least 620, a lender will not even consider you for those great mortgage rates. In addition, you also need to have a steady income and stable employment to be considered for a mortgage loan. And even if you meet all of these qualifications, you will still need to have a significant down payment – between 10 and 20 percent – in order to be considered for a loan.
If you don’t meet these qualifications, all hope is not lost. If you are willing to pay a couple extra percentage points on your mortgage, you may be able to get a mortgage loan. Surveys show that about 75 percent of recent homebuyers stated that it was much more difficult to get a mortgage than they had expected. At least 10 percent of those surveyed reported that their lender gave them a higher interest rate than they were expecting.
The mortgage debacle has affected all aspects of the housing industry. And with the tightened credit restrictions, it almost seems impossible to get a home if you are a first-time home buyer. But if you are dedicated and motivated, you can save up a sizable down payment and become a more attractive risk to banks and lenders. So the dream of home ownership is not totally dead. It is just much more difficult to attain these days.
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