Mortgage rates are at an all time low, refinance and save on monthly payments today
With mortgages rates at an all time low there are tons of homeowners that are looking to save money on their home loan with a low mortgage rate refinance option. For many homeowners a low mortgage rate refinance option will save them tons of money on their monthly payments and some homeowners are even able to cut their monthly mortgage payments in half. The only problem is that many of the homeowners that are looking for a low mortgage rate refinance option are not able to qualify for them because of all the changes that have occurred in the mortgage industry.
The mortgage industry has made the guidelines for a low mortgage rate refinance much tougher than they were in the past. Homeowners now need to have a much higher credit score than they did before. Unless a homeowner has a 620 FICO score or higher, they will not be able to get any type of financing for their home. Also to do a low mortgage rate refinance a homeowner will need to show that some equity has been built up in the house. This equity needs to be around 20% of the homes value. The amount of equity needed is based upon the type and area of the property that the low mortgage rate refinance is on.
For the most part, many of the banks are struggling with the loans that they have issued in the past. Many of the homeowners have defaulted on their loans and left the banks holding the properties. This is why the banks are being much more careful of who they offer a low mortgage rate refinance to. The bottom line is that they do not want to be stuck with more foreclosed properties on their books.
At the end of the day, strict low mortgage rate refinance guidelines are based on how risky the homeowner is. The more risky that the homeowner is, the harder it will be for them to be approved for a low rate mortgage refinance option. Depending on the level of risk, the harder it will be for the homeowner to be approved and the more expensive it will be for them to borrow the money. There are also different guidelines for loan options depending on if it is a first or second mortgage.