Shop Lenders For Best Mortgage Refinancing Deal
LINDA WERTHEIMER, host:
If you own a home, youve probably been getting a lot of offers in the mail to refinance your mortgage. That's because interest rates are at record lows.
Joining us to talk about whether this is a good time for you to refinance is Jessica Silver-Greenberg. She is a reporter at The Wall Street Journal. She's in our New York studio.
Welcome to the program.
Ms. JESSICA SILVER-GREENBERG (Wall Street Journal): Thank you, Linda.
WERTHEIMER: Well, first of all, how low are interest rates right now?
Ms. SILVER-GREENBERG: Interest rates for 30-year fixed mortgages, which is the traditional plain vanilla kind of mortgage that a lot of people want that is out in wide circulation, those rates are at historic lows; they keep on dropping. They've certainly defied expectations and they're the lowest in recorded history.
Right now, at the end of last week - last Friday - they were around, I believe, 4.41 percent.
WERTHEIMER: The other thing, of course, that we're always hearing about banks, is that they're not lending, even under circumstances like these. Is there really real money out there?
Ms. SILVER-GREENBERG: There is an opportunity for people who are interested in either purchasing a home or refinancing a mortgage that they already have. They can find great rates at the large lenders. Of course credit history is going to be very important, and we've seen banks certainly tighten up the flow of loans that they're making and raise the standards for borrowers who get those loans. But that said, for the interested home buyer or home refinancer there are good rates out there. It's just a question of where you go to look.
WERTHEIMER: So how do you decide whether this is the time for you to refinance?
Ms. SILVER-GREENBERG: I think it's a question of actually going out and doing the leg work. If you can get a significantly lower rate, which a lot of borrowers who I interviewed for this story say that they got, it's a great time to refinance. Now, borrowers shouldn't stop at the big lenders and assume that the rates that the top three lenders are offering them is all that's out there, 'cause that's certainly not true. There's a plethora of other lenders, actually, that sometimes can provide much better rates.
Ms. SILVER-GREENBERG: Community banks, regional banks, credit unions, and independent mortgage brokers, actually. On average, what we saw in our research was that rates were lower at the regional lenders and independent mortgage brokers than they were at the top three lenders. And the top three lenders are Chase, Wells Fargo, and Bank of America.
WERTHEIMER: There was a tremendous amount of refinancing going on right before the so-called housing bubble broke. If you have refinanced your mortgage already, does it make sense to refinance it again?
Ms. SILVER-GREENBERG: It does. If you're not happy with the conditions that you've refinanced into, which a lot of people aren't - they thought that what they were getting was a good deal back before the housing bubble burst, they were less concerned about adjustable rate mortgages, which I think people now are very concerned about, they want to lock in a fixed rate for the duration of their mortgage - you can absolutely go back to a variety of lenders and refinance your mortgage again. Just because you've done it once doesn't mean that that's it.
WERTHEIMER: There are a lot of people who perhaps need refinancing the most, those people whose mortgages are underwater, where their houses are worth less than the amount of money they've borrowed to pay for them. Can folks who are underwater do this?
Ms. SILVER-GREENBERG: They can. They can. Again, it depends on credit history, really, and it depends on the credit profile of the person. Now, what we're seeing is that the best rates are really only available to people with very pristine credit profiles. That means high credit scores, no delinquencies, no delinquencies in mortgage payments. And so while we're talking about good rates being available, some would say it's unfortunate that they're only available to a subset of the population that fits this credit profile.
WERTHEIMER: Thank you very much.
Ms. SILVER-GREENBERG: Thank you.
WERTHEIMER: Jessica Silver-Greenberg is a reporter with the Wall Street Journal.
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