Interest Rates Are Low, but Banks Balk at Refinancing

[Modee]

Rates Are Low, but Banks Balk at Refinancing - NYTimes.com

Mortgage rates in the United States have dropped to their lowest levels since the 1940s, thanks to a trillion-dollar intervention by the federal government. Yet the banks that once handed out home loans freely are imposing such stringent requirements that many homeowners who might want to refinance are effectively locked out.

Right - the Obama administration gave these banks handouts, but they are not lending much if any money to anyone who might NEED it.

[John14789]

That's right but private investors are still giving out home loans. There are new investors poping up in the home loan industry who are even willing to give loans to borrowers with 620 credit scores which is fair to good. I'm guessing banks are afraid to give out loans since people still don't have jobs but they're even holding back on people who have steady jobs for 2+ years.

[Modee]

True, but you're talking double digit interest rates for such private loans.

[John14789]

Well not actually double digits. Getting a wholesale home loan will give you the interest rate which is the norm. I know someone who has access to wholesale home loans and gets very good interest rates from private investors.

[Modee]

Interest rates are remain at historic lows, but the problem is getting APPROVED for the loans. Five to eight years ago, any applicant with good credit could get a loan, based on STATED income (just stating what their income was, which was not even verified).

Currently, everything is verified, including tax returns, and income to loan ratios are so low that it is hard for even salaried people to get high dollar loans, let alone the self employed.