I didn't have a chance to look at the current mortgage rates yesterday, so I looked at them th is morning. These are rates from yesterday though because todays rates won't post for about another hour or so. Here is what I found
Lender: AFCU
Loan Type
Interest Rate
Discount Points
Origination Fee
APR
10 Year Fixed
4.7500% 0% 0.5000% 4.8998%
15 Year Fixed
4.7500% 0% 0.5000% 4.8545%
20 Year Fixed
5.1250% 0% 0.5000% 5.2082%
30 Year Fixed
5.1250% 0% 0.5000% 5.1864%
30 Year Jumbo
6.5000% 4.1250% 0.5000% 6.9681%
These are historically low rates. Now there is a huge demand from consumers wanting to take advantage of these incredibly low rates, however the problem that the majority of people are running into is that they don't have good enough credit to get approved for the loan. So don't expect to be able to take advantage of these low rates without having a credit score of about 740 or higher. These rates won't be around for ever, so if your credit isn't as good as you would like it to be, then start paying off your credit card debts and any other debts that you may have to increase your credit score and then apply for a refinance (if a refinance makes sense for your situation) or if you are looking to build a home, get started in the process so that you can lock in the lowest rate available based off of your credit score at the time that you apply.
I know of an individual who was going through a tough financial time due to credit card debt and a higher interest rate than what was currently available, so he went to his financial institution and applied for a refinance on his mortgage and was denied due to his current credit score. Had he been approved, he would have saved over $200/month just on his mortgage alone. So that is just 1 example of why having good credit is so important and also supports what I said earlier in that just because interest rates are at a historic low doesn't mean that it will be easy to be approved for the loan.
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It is way true that you MUST have good credit in order to get a good interest rate and in most cases to even qualify for a loan, refinance, etc. It has always been important for me to have a good credit score and I have tried to teach my kids the importance too!
ReplyDeleteKnowing about credit and how to manage finances is something that every man, woman and child should learn how to do. No individual is ever too old or young to learn how to effectively manage finances. I will say that the earlier in life you learn how to manage your finances, the better off you will be later in life, so there is immediate payoff in that you can be somewhat prepared now, but you can also be prepared for the future. The economy is not something that any one individual can control, but you can control your own personal economy and you can control how fast you payoff your debt (if you have any). The way the current economy is, there isn't better time for individuals to make sure that they are Maximizing their Incoming and Minimizing their Outgoing.
ReplyDeleteOne word of caution around interest rates too is don't be fooled by all the advertisements you receive. Many of those low low rates don't disclose discount points right up front. So, save yourself some time and read the fine print!!
ReplyDeleteI agree....A lot of lenders will advertise super low rates, but don't or won't disclose that to get that rate you have to buy down 3 points of interest which could cost upwards of $10,000 depending on the amount of the loan. Thanks monte for that info.
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