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30-Year Mortgage for 4%, but Is This Real?

Written by Gary North on December 22, 2011

What is the lowest rate anyone can get in your region? Do you know how to find out? It’s easy. Go here: www.realestate.yahoo.com/loans. I bought a house in 2005 using this service. I found the best rate there.

These days, the rates are amazingly low. They are so low that I recommend re-financing your home if you don’t have much equity, assuming you can do this.

Why re-finance? Because serious price inflation is coming. Rates will rise.

But there is a problem. When rates rise, this usually forces down home prices. But if you are not going to sell and move into a rental, take advantage of today’s low rate.

Can you really get this low a rate. Maybe not. Here are reasons why you may not be able to do it.

1. You’re not paying points

Average rates in Freddie Mac’s survey include average discount points paid for the mortgage. But not everyone is willing to pay points. . . .

Unless you’re going to live in your home for a very long time, paying points often doesn’t make sense, said Greg McBride, senior financial analyst for Bankrate.com. . . .

2. Your borrower characteristics mean price adjustments

A credit score on the low side will prevent you from getting the lowest rates. Low levels of home equity will also mean a pricier mortgage rate.

That’s thanks to loan level price adjustments from Fannie Mae and Freddie Mac that have been making it tougher for borrowers to get the best rates for the past few years. . . .

Those with credit scores below 700 will have a tough time getting the rates in the low 4% range that everyone has been talking about, McBride said. . . .

3. Your property type means higher rates. . . .

4. You don’t have recent proof of income. . . .

5. Your lender isn’t hurting for business. . . .

It’s worth finding out.  www.realestate.yahoo.com/loans

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