The average interest rate on a 30-year fixed-rate mortgage hit 3.63% for the week of March 10, marking the highest point since last summer. So while a seller's market may be taking shape, it's still a great time to shop for a mortgage, especially a refinance. That's why it's so frustrating for homeowners who can't get on the bus.
So what's keeping you from getting a refinance loan right now? Here's a look at five of the most common culprits:
Same as it ever was when it comes to mortgage lending -- you're going to need to meet a lender's qualifying credit score for a refinance, which in many cases will be higher than what you'd need for a purchase loan.
For conventional refinancing, you're likely looking for at least a 740 score to really capitalize on current rates. The bar won't be quite so high if you're going after a government-backed option like an FHA or VA loan. Make no mistake: A loan program may not have a credit score requirement, but the lenders who actually issue loans certainly will.Right now, for example, VA lenders are generally looking for at least a 620 score. But you'll more than likely need at least a 640 to start the refinance conversation.
Your Home Is Underwater
Values are starting to rebound in some parts of the country, but a lower-than-anticipated appraisal remains a common refi-killer. Consumers who owe more than their home is worth know this all too well. Pursuing a traditional refinance is all but impossible for underwater homeowners -- and that explains why the government's special refinance program for distressed borrowers is absolutely booming.