Business Journal: Mortgage rates

Mortgage director Shelby Chapin looks over a rate sheet while working Nov. 2 at the Gruene branch of First State Bank. 

NEW BRAUNFELS — Now is the time. Mortgage rates are at an all-time low. Although rates have gone back up since falling below 4 percent in early October, the numbers are still low.

“I’ve been here 33 years, and have never seen them this low,” said Susan Granzin, manager at Extraco Mortgage, 448 S. Seguin Ave., New Braunfels.

“Rates are still going up and down based on the U.S. economy and the European market, but FHA loans were at 3.75 percent and conventional loans were at 4.25 to 4.75 percent. Those are awesome rates.”

Granzin expected rates to stay low for some time, at least through the end of the year. She said now was the time to act on getting a good deal on financing for a new house or refinancing a mortgage.

“The first thing you need to do for prequalification is get your credit scores. Those credit scores are very important. They determine your interest rates,” she said.

Granzin said some people liked the convenience of getting their credit report at home instead of learning their credit score at a mortgage lenders office.

“You can get a free report at www.freecreditreport .com,” she said.

The higher your credit score, the better your chances of being able to obtain the low interest rates.

As for refinancing an existing mortgage, Granzin said the general rule of thumb was to refinance if the interest rate is going to drop by 11⁄2 to 2 percent on your existing mortgage.

“You get more for your money,” Granzin said.

Changes to the Home Affordable Refinance Program (HARP) were announced on Monday by the Federal Housing Finance Agency that stated homeowners could refinance their homes, even if they owe more on their homes than what their homes are worth.

As stated in the Federal Housing Finance Agency news release:

“An important element of these changes is the encouragement, through elimination of certain risk-based fees, for borrowers to utilize HARP to refinance into shorter-term mortgages. Borrowers who owe more on their house than the house is worth will be able to reduce the balance owed much faster if they take advantage of today’s low interest rates by shortening the term of their mortgage.”

To qualify, the existing mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009, and borrowers must be current on their mortgage payments, with no late payment in the past six months, and no more than one late payment in the past 12 months.

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