Current Mortgage and Refinance Rates for May 2019

• Rates and payments remain constant, despite interest rate changes.
• Stability makes it easier to budget.
• Simple to understand.

• Interest payments tend to be higher.
• To get a lower rate, borrowers have to refinance the loan -- and pay closing costs again.

Borrowers who plan to stay in a home many years and want predictable, stable payments at the same interest rate for the life of the loan.

• Feature lower rates and payments early in the loan term.
• May qualify for more house because payments are lower (initially).
• Help you save and invest more money with a lower payment early in the loan.

• Rates and payments can rise over the life of the loan.
• Higher rates -- and payments -- when loan resets can be hard to manage.
• ARMs are difficult to understand.
• Lenders have much more flexibility to customize.

Borrowers who don’t plan to stay in a home for more than a few years -- especially when rates are higher.

• Can be used for a primary home, second home or investment property.
• Overall borrowing costs tend to be lower than other loan types.
• PMI is cancellable once you’ve gained 20 percent equity.
• Put as little as 3 percent down for agency loans.

• Minimum FICO score of 620.
• Debt-to-income ratio of 45 to 50 percent.
• PMI typically required if your down payment is less than 20 percent.
• Significant documentation required to verify income, assets, down payment and employment.

Borrowers with strong credit, a stable income and employment history, and a down payment of at least 3 percent.

• More relaxed credit requirements.
• Don’t require a large down payment.
• Open to repeat and first-time buyers.

• Mandatory mortgage insurance premiums that cannot be canceled on some loans.
• Higher overall borrowing costs.
• May require more documentation to prove eligibility.

Borrowers who have low cash savings, less-than-stellar credit or can’t qualify for a conventional loan. VA loans tend to offer the best terms and most flexibility compared to other loan types for military borrowers.

• Borrow more money to buy a home in an expensive area.
• Interest rates tend to be competitive with other conventional loans.

• Down payment of at least 10 to 20 percent is needed.
• Minimum FICO score of 660, but average is typically 700 or higher.
• Maximum DTI ratio of 45 percent.
• Must have significant assets (10 percent of the loan amount) in cash or savings accounts.

Affluent borrowers purchasing a high-end home who also have good to excellent credit, high incomes and a substantial down payment.