Mortgage Rates and Refinance Rates

Mortgage and refinance rates have been historically low in 2010. Interest rates were driven to record lows to help the housing market recover from one of the worst housing recessions on record. After the boom in home building and the price of homes sky-rocketing funded by excess capital and very lose lending standards prices have come back to historical norms.

Now is one of the best times ever to buy a home since mortgage rates are so low. Another reason why buying a home now is one of the best times to do so is because homes are so much more affordable. In 2010 homes became the most affordable on record between the drop in rates and the drop in home prices.

Unfortunately millions are unable to take advantage of this situation because millions are unemployed. Another hurtle to home ownership these days is banks, credit unions and mortgage companies are one again requiring a 20 percent down payment. If you can afford to buy a home and have been waiting for mortgage rates to head lower or home prices to head even lower you should seriously go ahead and take the plunge because mortgage interest rates are heading higher.

Millions more were unable to take advantage of low rates to refinance their mortgage because they didn't have the required amount of equity in their homes or they were upside down on their mortgage which means they owed more than their homes were worth. No bank or credit union these days will lend more money than a home is worth.

Mortgage and refinance rates hit record lows in the fourth quarter of 2010 and have since headed higher. Late last year fixed conforming 30 year mortgage rates hit an all-time low of 4.23 percent. To give you some historical perspective on how low rates are back in the early 1980's fixed conforming 30 year mortgage rates were over 17 percent according to Freddie Mac.

The 4.23 percent rate is the average, you can find rates lower. Some mortgage companies, banks and credit unions were offering fixed 30 year loans 4.00 percent. If you were willing to buy down the rate by paying mortgage points upfront you could get a 30 year loan at 3.50 percent.

These days fixed conforming 30 refinancing and mortgage rates are around 5.00 percent. In last week's Primary Mortgage Market Survey Freddie Mac reported the average 30 year mortgage rate was exactly 5.00 percent.

The future direction of mortgage rates and refinance rates will be higher in 2011 and 2012. As the economy improves, the unemployment rate goes lower and inflation heads higher the Fed will raise interest rates which will cause mortgage rates, savings account rates and CD rates to head higher.