Freddie Mac said the average home loan rate for 30-year fixed mortgage this week was 4.54%, down from 4.56 last week, mortgage company.  The home loan rate on the 15-year fixed loan dropped to 4%, down from 4.03 percent last week and the lowest on record.  Home mortgage rates have fallen since the spring.  Find out today if you qualify for a no cost mortgage.

Low rates helped spark a little activity in the weak housing market. Home loan applications for homes buying crept up 2% last week from the previous week, the Mortgage Bankers Association said Wednesday. Still, the housing market has been struggling and overall home mortgage applications were down last week as fewer people applied for mortgage refinancing assistance.

Home Mortgage Rates starting at 4.125%

According to McClung there are also some local housing financing agencies still providing homebuyer down-payment assistance.  “There are a lot of home loan options to getting someone in their home today with as little as 5% down,” McClung said.  In order to make sure you can take advantage of this opportune time, McClung says it is important to know how to be prepared. She says lenders are looking for a little more than they were a few years ago.   “Today somebody interested in a mortgage loan must keep track of their income documentation, their tax information from the last couple of years,” McClung said. “They also need to make sure that they have stable monthly income and that they can verified with acceptable documentation, like pay-stubs, W-2′s 10-40;s etc.  To be sure that this mortgage lender is going to be comfortable it is imperative that you demonstrate the ability to afford the new mortgage payment for the near future.”   In most cases, no income verification loans are unavailable. 

VA loans enable borrowers to get a 100% no moneydown mortgage, but you must qualify for the VA loan eligibility.  FHA mortgage loans allow borrowers to put a down-payment as little as 3.5% of the home sales price and most conventional lenders are asking for a 20% down-payment.

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When will mortgage rates rise?  Nobody knows for sure, but most finance advisors suggest that as soon as we get some positive economic news that mortgage refinance rates will rise.  Needless to say, the fixed rate refinancing trend will continue while interest rate remain this low.

Badendyck is one of many homeowners who are looking at today’s fixed-rate mortgages and deciding to refinance. Just a few years ago, mortgage rate less than 5% seemed almost too good to be true, but with motivated home loan lenders and an aggressive Federal Reserve, 2010 continues to see declining interest rates for new home financing and fixed mortgage refinancing.  And, if that isn’t enough to motivate you, 3/1 ARM  and 5/1ARM home loans are available below 4%.  These ARMS ensure fixed interest rates for 3 and 5 years.  Yes, those home mortgages carry a higher risk than the fixed rate mortgage do, but to many homeowners the hybrid ARMS make sense.  For example if you plan to move in the next few years, but would like to save some money every month in the meantime, then the 3/1 or 5/1 ARM’s are no brainers. 

According to Freddie Mac, home mortgage rates on fixed thirty-year terms declined again last week to the lowest point of 2010. So it is not surprising that refinance application volume is at its highest level since October 2009, according to the Mortgage Bankers Association.  Military borrowers get the best of both worlds because the VA mortgage loan guarantees a low fixed rate and no down-payment is needed for home buying.  These no money down mortgage loan is only available to borrowers who have earned the VA loan eligibility.

For everyone else, there is the FHA mortgage option that extends affordable lending to all Americans with or without a military background.  FHA mortgage refinancing has been very popular recently, because the conventional mortgages require more equity.  Many homeowners have seen their home equity disappear as the housing crisis continues to grow.  Again if you have good credit and enough equity to qualify, we suggest you get off the couch and talk to a loan company about locking into better mortgage with lower interest rates and lower monthly payments.

If you qualify for a mortgage, we recommend a no cost home loan because you get a great low mortgage rate and you benefit significantly by letting the mortgage lender pay the lender fees and closing costs.

Although Federal Reserve rates will eventually affect mortgage interest rates, the effect may not be directly or immediately. When a bank or home loan lender extends you a mortgage loan, they will resell that loan to a government agency to get free money to loan to other people. The governmental agencies are called secondary lenders and sell bonds to fund the loans that the direct lenders sell to them. Bonds are mortgage-backed securities and also in constant competition with securities in the stock market. For bonds to win over stocks, they have to offer higher return rates, which means the mortgage governmental agencies buy from lenders has to have high interest rtes. This is the reason that causes fluctuation in the mortgage market nowadays.

Mortgage lenders have lending guidelines that consider criteria such as credit score, loan-to-value and debt to income ratios to underwrite each applicant’s eligibility. The more risk a customer shows, the higher mortgage rate a lender will charge for mortgage interest rates as well as closing costs.  Make an effort to shop multiple lenders and brokers so that you can compare loan options from various companies.

Meanwhile, the fifteen-year fixed rate dropped to 4.36%, the lowest figure since Freddie began tracking such mortgages in 1991. The average mortgage rate was 4.46% last week and 5.78% last year. Five-year Treasury-indexed hybrid adjustable-rate mortgages also hit a record low, dropping to 4.42% from 4.51% and 6%, respectively. After yields on Treasuries rebounded from the multi-decade lows they hit earlier this year, they have since retraced some – taking home mortgage rates along with them.

Bad credit mortgage loans continue to be challenging for many Americans who have no equity or late payments, but the FHA mortgage loans and the Obama loans remain genuine options for borrowers with challenged credit seeking refinance alternatives.

According to the Commerce Department’s data for August, new home sales rose for the 5th time but existing home sales fell unexpectedly, breaking four months of improvement. And while the S&P Case-Shiller indexes showed home prices increased again in July from the prior month, Dallas Federal Reserve President Richard W. Fisher warned on Tuesday that housing, though stabilizing, was still “on life support.”

The mortgage rate quotes included in Freddie Mac’s survey were taken before the Fed said Wednesday it will pump $1.2 trillion into the economy in an effort to lower rates on mortgage loans and other and loosen credit. That is expected to drive first and second mortgage rates down further.  FHA rates even dipped below 5% for the first time since January.

The Associated Press reported the coming week having a series of economic reports that aren’t expected to show significant improvement in the nation’s economic health. But the mortgage market and housing sectors may get another lift if there are more signs the economy is at least not getting worse.

Perhaps the greatest potential influence this week will be the Federal Reserve’s assessment of the economy that will accompany its decision on interest rates after a two-day meeting that ends Wednesday. To try to revive the economy, Fed Chairman Ben Bernanke and his colleagues already have slashed a key lending rate to banks to a record low, zero to 0.25 %. They have pledged to use “all available tools” to revive the economy. One option is buying long-term Treasury securities to help further drive down mortgage rates and help the crippled housing market, economists said. Another option is to boost the Fed’s purchases of debt issued or guaranteed by mortgage giants Fannie Mae and Freddie Mac.