Rates for Mortgage Loans Dip Again
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by: marciafreeman
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The interest rates for mortgage loans dropped to historically low levels the end of March 2009. The rates were even lower than the previous records set in January 2009. In fact, interest rates for mortgage loans are lower than they have ever been since Freddie Mac started keeping statistics on them over 35 years ago. The glut of unsold homes continues to weigh heavily on the market and many in the real estate industry are hoping the new rates will spark some movement in the housing sector. It would be nice if all it took to boost the housing sector was low rates. In a post credit sector meltdown reality, however, banks and lending institutions have now instituted stricter standards. Riskier borrowers that just a couple years ago would have easily been given a loan are not being considered now. Borrowers need to have cleaner credit histories and better credit scores to obtain mortgage loans offered by most banks and lenders. In addition, more money must be put down to obtain the loans. More and more consumers are applying for mortgage loans, but less and less can now qualify.
Many analysts believe there will continue to be more consumers refinancing mortgage loans than taking on loans for new homes. There are still many buyers who are not ready to invest in real estate when they are not sure when it will recover. There are others who are just not willing to risk being saddled with mortgage loans during such tumultuous economic times. Then, of course, some want to buy but cannot qualify for a home loan under the more restrictive lending standards. Although applications for refinancing make up the bulk of the mortgage applicants this year, current homeowners are also facing tighter lending standards. In addition to needing higher credit scores to qualify, homeowners must now have higher amounts of equity to be eligible for a refinance. A large number of lenders now require equity of at least 20 percent. For homeowners who lost equity when real estate values dropped, this requirement can be frustrating. Those applicants who not long ago would have been able to refinance can no longer do it, because they cannot meet the equity requirements. That being said, there are a lot of homeowners who are eligible to refinance and are jumping at the chance to lock in a better mortgage interest rate than that of their original loan. After such dismal real estate times, many in the industry welcome any and all action in the real estate and loan industries, whether it is due to refinancing existing homes or purchasing new ones. Reference Refinance home loan ...
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