There was an interesting column published over at Bloomberg recently. It wisely recommends that people lock their loans now while they are still in the 5.5% and less range. It also points out that lending standards remain quite tight and there are always fees associated with refinances. Here are some excerpts:
So who is actually getting some?
I mean those beautiful fixed-rate mortgages advertised at 5.5 percent or less. Maybe, in a virtual world, an avatar can drop into a virtual bank and close a loan at that rate, but here in real life, achieving it is close to a miracle.
…
It’s taking longer to close a loan. Lenders, burned by their own sloppy practices, have gone back to checking what you say on the application and that takes time. For example, they are routinely checking your income claims against your tax return, says Jim Pair, president-elect of the National Association of Mortgage Brokers.
Once you strike a deal on a mortgage, protect yourself by locking up the interest rate for the length of time it will probably take for the loan to close. Rates can change as much as a quarter-point in a single day.
This article is overly pessimistic but it is good to remember that even government-backed loans are becoming harder to qualify for and that there are always fees involved.