It has been noticed for quite some time that the mortgage rates have been incredibly low. It has tempted a number of people to refinance or buy their first home. But it’s really doubtful whether everyone would qualify for the lower rates or not. There are lots of factors which one has to consider in this regard. Some of these are mentioned below:

Can everyone get a mortgage with a low rate?
It is not necessary that everyone would get a lower rate like 4.78%. It should be kept in mind by the buyers that it is average rate. It should not be considered as the standard rate.

Another important thing which most of us don’t know is that a rate can change several times during a day. This is due to fluctuations in the market. Thus, you’ll note that mortgage rates are 5.5% in the morning but has increased to 5.75% in the evening.

Loan rates can also vary depending upon the loan type. Thus, a 15-year fixed-rate mortgage may have a lower rate than a 30-year fixed mortgage. Mortgage rates also vary due to the size of the loan. If you are planning to take a “jumbo loans”, be ready to pay higher interest rates.

Are there other factors which may not allow me to get lower rates?
Yes, there are other factors as well which may prevent you from getting a lower rate. Your credit score is one of them. If you have a credit score of around 800, lenders will be glad to offer you attractive rates. On the other hand, a borrower with a credit score of 650 will not get good rates from the lenders. Rates will also depend upon the amount of loan you want to take compared to the cost of the property. If you take a loan less than 80 percent of the home’s value, then, you can expect to get better rates.

Apart from low interest rates, are there other costs to worry about?
Yes, there are other costs which you’ll have to pay. One of the costs which most borrowers confuse about is the Points or fees. There are some points which you can pay at the time of application while there are others which are paid at the closing. Apart from this, you will also have to pay certain fees like title insurance, attorney fees etc.

Should I consider other lenders before finally selecting the mortgage?
In my opinion, home buyers or owners who are seeking to refinance their current mortgage should do their own research. You can search online and get lots of information about current and future rate trends. You can also check out http://www.mortgagefit.com/rates/ to know the current rates available in the market.

Tags: 30-year fixed mortgage, future rate trends, mortgage rates

This entry was posted on Monday, May 4th, 2009 at 11:25 pm and is filed under Finance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.