By Stephanie Sims

It’s hard not to watch the news without hearing about the housing industry, and lately, the buzz is all about mortgage rates and 4 percent loans. Thirty-year fixed rate mortgage rates fell to 3.94 percent recently, and buyers are all but asking their agents, “How can we get that rate?”

Brian Dempsey

Brian Dempsey, a vice president of retail mortgage sales at Bank of America, says that buyers who qualify for that loan need to be A+ buyers, essentially; they need a credit score above 740, a loan to value of a minimum of 25 percent, and to qualify for income perspective, debt to income ratio.

“The market could have rates a quarter of a percent higher for buyers who don’t meet these qualifications,” Dempsey said. But, he adds, that doesn’t mean all hope for a low interest rate is necessarily lost. A prospective buyer with a 680 credit score could have a rate a quarter to a half percent higher, but during this time of “historic” low rates, “this could be the best rate the client has ever seen,” he said. “It’s just not the cream of the crop rate.”

Dempsey added he’s not yet seeing customers paying points for lower rates, and he’s not advising customers to do that, either, because it’s possible rates could go lower. This depends on market forces, but lately in the market, anything can happen in the next three to 12 months.

The bottom line with the 4 percent, or any low rate loan, warns Dempsey, is that if it looks too good to be true, it might be. “Watch out for the bait and switch,” he said. “More restrictive legal terms should be in those ads that aren’t. Do research and look into if there are any fees associated with the mortgage. If the interest rate seems too good to be true, make sure you check it out.”