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30 Sep 11 Record Low Home Loan Rates But Who Qualifies?

It’s no secret that the Federal Reserve has made significant efforts to keep interest rates on home loans artificially low in an effort to help the housing industry and U.S. economy rebound. Today the fixed 30-year mortgage rates have dipped below 4% for the first time ever.  Unfortunately, most borrowers do not qualify for home mortgage loans with these record low rates. For the few consumers that meet the lender requirements this means the opportunity to qualify for the best refinance rates of all-time.

Of course, these days many people are in no position to buy or refinance a home. Many can’t meet the stringent lending standards that have prevailed since the housing bust and bank bailout, or they owe so much more than their house is worth that they can’t get a new loan at a better rate. According to loan officer Darin Hardin of Premier Mortgage Group in Ladera Ranch, California, “The phone is ringing off the hook with people who want to refinance, but the property values are not high enough for homeowners to qualify.”

The record low interest rates are driven by the Fed’s announcement last week that it would load up on purchases of long-term government bonds and mortgage securities. The extra demand was intended to drive down long-term interest rates, including those for home loans – and it worked. According to Freddie Mac for a fixed 30-year mortgage, the typical rate for solid borrowers was 4% last week and early this week. That’s below the record low of 4.08% set in 1950 and 1951.

According to the Mortgage Bankers Association, more than three-quarters of all home loan applications are now for refinances, although the volume is more of a boomlet than a boom. As rates sank toward 4% recently, borrowers were refinancing their loans at about half the pace seen in early 2009, when rates cracked the 5% barrier for the first time since 1956. Read more: Kansas Ciity.com.

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