Our good lender friend, Rich Paravella with Equity Services, sent us a general update about things in his world and granted us permission to share it with the rest of the world. Take it away Rich...
"Here's a brief update of what's going on. I've attached 2 articles, but will sum it up here for you:
Interest rates have come down recently - but mainly for borrowers with strong credit, good equity, and documentable income. Credit standards have tightened, which has made it more expensive - often prohibitively so - for many individuals to get a loan. Generally, individuals need a credit score of 620 to qualify for a loan, but they have to pay a fee equivalent to about
2.75 percent of the loan amount, which can translate into a rate of about 1
percentage point higher than the best rate available. For borrowers on
the fringe - low credit score, erratic documentation, high debt loads, et cetera - it may be possible, but that financing may be cost prohibitive in those cases.
Also, there is speculation about the gov't in effect, subsidizing interest rates at 4.5%. This is NOT official, rather just a talking point at present. If something like this occurs, it would likely be for Owner Occupied Purchases only - Not refi's.
http://www.nytimes.com/2008/12/04/business/04refi.html?ref=yourmoney
http://online.wsj.com/article/SB122833771718976731.html
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