Mortgage rates hold steady at record lows — but can you really take advantage of them?

The 15-year fixed-rate mortgage rose one basis point to an average of 2.59%, while the 5-year Treasury-indexed hybrid adjustable-rate mortgage fell by that same amount to 3.08%.

“Mortgage rates held steady today as investors remained concerned about the economic and real estate outlook, following this week’s drop in existing home sales and the International Monetary Fund’s downgraded global GDP forecast,” said George Ratiu, senior economist at Realtor.com.

The low-rate environment has made refinancing a more attractive proposition overall to many Americans.

But cash-out refinances, through which homeowners can tap some of their home’s equity, have taken on additional significance in the context of the country’s shaky economy.

“A cash-out refinance may also provide borrowers with some breathing room in the event that they find themselves in a short-term financial challenge,” said Rick Sharga, a mortgage industry veteran and founder of CJ Patrick Company, a real-estate consulting firm.

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But getting a cash-out refinance could prove difficult right now. Most banks have restricted their mortgage lending activity significantly amid the coronavirus pandemic. Many require borrowers to have higher credit scores, lower debt-to-income ratios and a more solid employment history than prior to the outbreak in order to qualify for a loan.

Borrowers who work in industries hard hit by the pandemic may face an extra burden in qualifying for a new mortgage, experts said.

Lenders have also mandated that borrowers have larger down payments, meaning lower loan-to-value ratios. That could limit how much a homeowner could pull out of their home if they can find a lender willing to do a cash-out refinance.

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Many studies have shown that a significant share of Americans lack an emergency fund to cover unexpected expenses or a loss of income. As jobless claims continue to remain high, having access to one’s home equity could prove handy in the unfortunate event that a homeowner loses her job or faces a salary cut.

But cash-out refinances aren’t foolproof. “Borrowers should be careful that they don’t tap into their equity, spend that money and run up new, higher interest debt — that’s a lose-lose scenario,” Sharga said.

Time may be of the essence, too. “The recent surge of coronavirus cases in a number of states across the country has only added to the uncertainty, making it increasingly difficult for lenders to price in the appropriate amount of risk and gauge the long-term value of the loan they’re issuing,” said Matthew Speakman, an economist at Zillow ZG, -1.57% .

“That said, should this increase in COVID-19 case volume continue, mortgage rates would almost certainly fall further to new all-time lows; however, rates would likely rise if states can demonstrate that they have a handle on the virus,” Speakman added.

Low mortgage rates also benefit home buyers, naturally, since it makes the transaction more affordable. But even here, there will be limits to which buyers can actually take advantage of the low-rate environment.

Aside from the added challenges in qualifying for a loan, the housing market today remains highly competitive thanks to the low supply of homes for sale.

“Uncertainty over jobs is keeping many sellers on the sidelines and the steep decline in the number of homes for sale is pushing prices above their pre-pandemic pace and making homes less affordable for buyers currently in the market,” Ratiu said. “Low mortgage rates can only go so far in motivating buyers, when they meet reduced credit availability, fewer homes and higher prices.”