Are there mortgage rates as low as 1% out there, and if so, who qualifies for them?
Yes, there are 1% mortgage loans, but like the saying goes, if it sounds too good to be true, than it probably is. This type of loan is called an Option ARM and is a very powerful and strategic loan for the right borrower. If you need 1% to afford the payment, this loan is NOT for you. Basically, you get your statement every month and have a choice of 4 payments. You can pay the 30 Year payment, the 15 year payment, an interest only payment, or a minimum payment. The minimum payment is based on the 1%. BUT, because your payment is so low, it does not cover any principal and it does not cover all the interest, so the amount of interest not coverd gets added on the your loan balance.
So, with a 1% home loan, your balance will increase if you only pay the minimum, and in a short time, your loan will re-amortize and your payment will double or triple and you will be very upset that no one explained that to you.
The loan is good for Investors or Self employed people who have unsteady cash flow. When they make a lot, they pay enough to keep the loan current, and when they have a bad month, they pay the minimum. I hope this helps!