What’s new in the latest rate fall? That those with less than great credit can take advantage.
Until now in this recession, the great refinancing rates went only to those with stellar credit scores.
Lenders have reacted to the subprime crash by upping their loan standards.
Fannie Mae and Freddie Mac have apparently stopped raising lending standards and are even beginning to ease them.
For competitive reasons, the large lenders are reluctant to reveal their refinancing numbers, but they acknowledged that the news had been getting ever better for many borrowers. JPMorgan Chase, for instance, said that “refinancings have increased dramatically as a percentage of all new mortgages from a year ago, and the refinancing dollar volume has risen even more dramatically.” Chase also said it had added staff to its refinancing unit to process applications more quickly.
Interest rates for 30-year fixed mortgages this week were 4.21 percent, just slightly above the 4.19 percent record set earlier this month, Freddie Mac, the other large mortgage company, said. The current level is estimated to be the lowest since the early 1950s. Two years ago, rates were about 6.5 percent.
Lower rates are merely a dream if you do not qualify. Early on, as the rates were coming down, Fannie Mae and Freddie Mac were tightening standards on loans they purchased. Lenders would not refinance loans they could not sell to the holding companies.