The average rate for fixed 30-year mortgage rates dropped to 4.32 % in the week ended today from 4.36 %, Freddie Mac said in a statement today. That was the lowest since the mortgage giant began compiling the data in 1971. The average 15-year mortgage rate was 3.83 %, also a record.   The Mortgage Bankers Association’s index of mortgage refinancing climbed 2.8 % in the week ended Aug. 27 to the highest level in over a year.   FHA mortgages remain the most popular home loan, with conventional loans coming in right behind the government loan program.

The survey also found a slight pickup in demand for residential home mortgages since April, particularly for non-traditional mortgage loans.  The senior loan respondents noted no change in underwriting standards for commercial real estate mortgages and little change in demand.  “Overall, the net fraction of banks that reported that demand for CRE loans had deceased continued to be small,” the Fed said.

Who would not want to lock into 4% home loan? But before counting all the money you’ll save, know this: Getting one of these oh-so-enticing loans isn’t easy. Want to know the ins and outs of refinancing? Here is the lowdown:

QUESTION: My lender said our mortgage was under water. Can I still qualify for home mortgage refinancing?

ANSWER: Technically, the answer is yes. There are some government programs that are available. If you have a Fannie Mae-owned loan, you can refinance even if you owe up to 25% more than the house is worth. To see if you have a Fannie Mae loan, go to fanniemae.com/loanlookup. There’s a similar program for Freddie Mac loans, too. Go to https://ww3.freddiemac.com/corporate/, to see if you have a Freddie Mac loan.

Before you get too excited, however, local mortgage brokers say that qualifying for one of those programs verges on impossible. “Probably less than 10% of homes under-water are actually eligible,” said David Van Waldick, an independent broker with Western Mortgage in Carlsbad. “It’s real difficult, I’ll tell you that.”

QUESTION: My friend said she got a 4.25% mortgage, but I my lender just quoted 5%. How is that possible?

ANSWER: Much like snowflakes, no two homeowners have the same situation. It depends on the size of the home loan, the value of your property, your credit score and your job situation. Your friend may qualify for a no cost mortgage as well if her credit score is above 720 and she is working with an aggressive lender. If you’re self-employed, for instance, it can get particularly tricky. And remember home loan rates can change constantly so there will always be a bit of difference between them. Because of that fact, get quotes on the same day so you can compare apples to apples, said Belinda Austin, a loan officer with Ranch & Coast Mortgage Group Inc. “The interest-rate market ebbs and flows with the bond market, and the only way to know if you are receiving the most competitive rate is to shop lenders and banks on the same day against each other,” she said.  Article was reprinted from the San Diego Union Tribune.

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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Borrowers continue to comment on how much more difficult qualifying for a home loan or mortgage refinance today as mortgage lenders and banks have tightened loan programs.  Now new home buyers need to be able to document their income with a 2 year history as stated income home loans have been repealed by most lenders.  The bottom line is that for the near future borrowers will have to prove their income to qualify for these appealing home purchase loans that guarantee fixed rates for 15 and 30-year terms.

The National Association of Realtors said Thursday that last month’s sales fell 5.1% to a seasonally adjusted annual rate of 5.37 million.  Most economists have suggested that the housing market stalled when the federal tax credits for first home buyers expired on April 30th.  Refinance applications increased in recent weeks but home purchase loan applications have stalled.  With home loan rates this low you have to wonder what kind of incentives consumers need to finance a home.

With home prices continuing to drop, more and more consumers now more have new opportunities to finance a home with a monthly payment they can actually afford.  While most conventional lenders are requesting 20% down-payments, FHA mortgage loans make more sense because borrowers only need to come up with a 3.5% down-payment.  According to Johnny Davis, a loan officer at Chase, “Loan applicants are usually surprised at how accommodating the FHA loan requirements are for first time home buyers.” Davis continued, “Although the home loan rates have dipped to record lows, many consumers are nervous to commit to a long term home mortgage because they are uneasy about the economy and future employment.”

According to Jerry Mlinar of Woodfield Planning, a Illinois mortgage lender said, “First time home buyers are motivated by low rates, but existing homeowners have a huge incentive to refinance because they stand to save significant money monthly immediately.”  Mlinar confirmed that his company saw an increase in home refinance applications, but cautioned that refinance guidelines for had tightened over the last few years.  The lender said that the stated income and no equity mortgages are no longer available.  

The average 30-year mortgage rate was little changed in the week ended July 9th, dipping to 4.49%.  The mortgage rate rested just below the record low of 4.61% set in March 2009, according to the MBA’s records that date back to 1990. Fifteen-year mortgage rates dipped to 4.08% last week from the record low 4.06 % set the prior week.  FHA and VA rates posted a rate reduction as well and more borrowers requested rate and term refinancing rather than cash out loans.  Read the original Mortgage Related News Article > 3rd Week of Record Low Mortgage Rates Drive Refinancing

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.

The major benefit is a reduced balance which will free up your cash flow and increase the monthly savings.  Also, you can have the debt paid quickly in less than eighteen months.  The only concern with debt relief would be is that you have to jump through some hoops to qualify and may have a short term blip on your credit but it’s not a big deal if you pay the debt off quickly.