During the month of October we have seen a couple shifts in a 30-year fixed rate mortgage, for the good of the consumer and real estate market. During the first week of the month, we saw the rates drop down nearing all time lows since about Mid 2009, when the rate was at a 4.82 percent. On the 8th it was said by representatives of Fannie Mae that the rate had hit 4.87 percent, almost a whole percent lower than last year.
The 15-year fixed rate also hit a low, at 4.33 percent, also a lot lower than it was this time last year. And also the lowest it has been since 1991, when the Market was at its peak.
What does this mean for the potential borrower and lenders? For the borrower it gives them more money to work with, when considering such an important purchase as a home. This is especially good news for those first time home buyers, trying to take advantage of the first time home buyer credit. Having a lower interest payment, calls for lower mortgage payments in general, in turn less of a chance for a borrower to go into default on their loan. For lenders, its bringing in more mortgage applications since January 2009, giving them more hope that less borrowers will go into default, because of such high interest rates that we have seen in the past, in turn making every ones stress eased, at least for now. Many experts have said that the homeowners who are looking to refinance their current loan will benefit from this drop in rates more than a potential buyer looking to purchase.
Just because the rates are nearing an all time low, doesn’t mean lenders are going to give out loans to just anyone. You still must meet the high standards of the lender, and keep in mind, standards of borrowing vary by lender. They still want to be sure that they are going to get full repayment of any money borrowed. Having a solid credit score, income, and down payment are just a few of the things that lenders are really looking for in order to even consider you for a loan.
If you are considering taking advantage of these low rates, contact a mortgage professional to pre-qualify you before you waste your time shopping for your home. It is important to do this before hand, that way if you don’t get qualified you are not disappointed when you already have your heart set on a home. Make sure to review your credit reports, and have all your financial information ready prior to consulting with a Lender. Your lender will be able to find the right loan for you and your family. Don’t think for one second that you wont be able to get funding, because there are many alternative ways to go about it in todays market, if you qualify of course. Consult your lender today.