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High Credit Score Homeowners Get Low Interest Rates from Bank of America

By Sally Maison
Published: Wednesday, December 16th, 2009

The mortgage refinance rates for Bank of America (BofA) are nearly in their all-time low for the last two months of 2009. Unfortunately, many are not able to avail BofA’s low interest rates because they have a bad credit score. Even property owners who have equity in their homes will not be able to get the current record-low interest rates because they either have a poor or a subprime credit rating. Finance advisers say the only way homeowners can know how much work they need to do is by knowing their credit ratings.

Industry specialists note that it has been quite a while now since BofA started offering low interest rates, below five percent, to homeowners who want to refinance their mortgage. Before November ended, the bank announced that it is offering interest rates at 4.49 percent for a 30-year fixed-rate mortgage. After that, the mortgage rates went back up to 4.76 percent before finally settling at the current 4.65 percent rate.  Analysts say mortgages have become extremely volatile this week because of the surge and fall in the 10-year treasury yield.

Last week, the 10-year yield rallied past seven percent, but went down again to almost three percent this week. Despite the volatility in mortgage rates, analysts say there are still reasons for homeowners to be happy. This is because the rates are near their all-time lows even if the rates are not consistent. Consumers who are hoping to refinance their mortgage before the year ends or early next year are advised to work on their credit score now.

One of the first things analysts advise consumers to do before applying for any line of credit is to check if their credit score is not affected by any fraudulent items under their name. Experts say identity theft and other frauds are very common during the holiday season so consumers must take extra measures to guard their credit score. They note that many consumers are not aware that an identity thief is using their accounts to make a fraudulent purchase that is why their credit rating suffers.

Finance advisers say the cost for getting a credit score is minimal, but its benefit can go a long way. Fees for getting a credit score vary, but the credit bureaus usually charge eight dollars per request.

Also, specialists warn homeowners to avoid paying late on their mortgage because of its adverse affect on a credit score, adding that people who stay current on their mortgage payments are more likely to keep their homes.

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