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Low rates, but not for you?

By Judy Martel · Bankrate.com
Thursday, September 8, 2011
Posted: 9 am ET

You've shopped around and finally zeroed in on a low mortgage rate. Your credit is stellar and you're ready to pull the trigger. Trouble is, the lender has no incentive to give you the advertised lowest rate and offers a rate a full percentage point higher.

In a frustrating turn for those seeking a mortgage, lenders aren't as hungry as they were in years past, making them pickier about who they lend to, as well as the rate at which they lend. The average spread between advertised mortgage rates and the rate lenders are offering has widened, from about .40 of a percentage point to around .64.

Lenders, of course, are looking for profit on higher rates. Like it or not, they don't have to lend at the lowest rates because they hold most of the cards. Mortgage rates are still low enough that demand remains high.

The best option for those looking to refinance a mortgage or buy a home is to take the lowest rate they've been offered and shop around to see if a particular lender, maybe a local one, will go lower.

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