If you have been thinking about refinancing or getting your first mortgage, it would be advisable to speed up the process as much as possible.  With the 10 year treasury rate yield up trending with great strength we could very well see mortgage rates start making their way towards 6%.  Luckily there are still many banks and mortgage lenders who are advertising mortgage rates under 5%.  While no one knows if you will get a mortgage interest rate this low, you will never know until you actually contact them and ask.  Most ads offer you an 800 number so it might be as easy as picking up the phone and giving them a call.

Congratulations on taking the first step in getting lower mortgage interest rates.  By doing the research, you are well ahead of most current home owners.  The next step is to get out there and actually contact some of the banks and lenders that can offer you a lower mortgage interest rate.

• Daily Mortgage Rates
• Mortgage Rate Forecast
• Mortgage Rate Trends

I will be very interested to see the data next week when the amount of mortgage applications do come in.  I would think that we will see a huge number as mortgage interest rates have decreased quite a bit in one week alone.  If you have been considering getting a refinance and have been pushed away by volatile mortgage rates, now might be the time to test the waters.  The Federal Reserve Bank has made it evident that they are going to do what it takes to cap interest rates, so why not take advantage of this great opportunity.

I know many of you will ask if it is smart to wait since rates are going to drop.  Well, if now is a time in your life where you have the ability to refinance, I wouldn’t wait much longer.  How many people can say that they have a mortgage rate around 5%?  There are a lot of steps when it comes to refinance, but President Obama is working hard to make sure that you get the lowest rate possible.  Use the resources you have and see what kind of interest rate you can refinance out; it never hurts to try!

The equation used for the correlation between mortgage rates and the 10 year treasury rate is

y = 2.7283(x)^2 + .5881(x) +.0308.

10 Year Treasury Rate – 3.29%
The correlation shows that the 30 year fixed rate should be 5.31%, actual rates….

30 Year Fixed Rate Mortgage – 5.21%

Once again, it is very likely we will see lower mortgage rates as Ben Bernanke continues to put the Federal Reserve in deeper debt.  This is great news for anyone that wants to refinance or get an extremely low mortgage rate at the moment!

On July 1st, 2009, President Obama announced that the refinancing part of the Making Home Affordable plan was being adjusted.  When the plan was first released in March, lenders were urged to let home owners with a 105% loan-to-value apply for a home refinance and likely get a low rate refinance.  Obviously this was not enough as it has been up to 125%.  Lets crunch some numbers to try and explain the different.

If you bought a $300,000 home in 2007 and you have paid $15,000 in principal since your purchase, you would have $285,000 of loan left to pay.  If you recently got your home appraisaed and the value was $245,000 you have a 116% loan-to-value in your home.  If this was the case prior to July, you would have no chance to refinance at ANY rate, no less a low rate.  Now that President Obama has extended the Making Home Affordable plan, you have a chance to refinance and it is likely that you will get a decent rate as the government is forcing the lenders hand.

The question that we all must ask is “will this help?”  My answer is no.  Unfortunately it does not matter how low of a rate you allow home owners to refinance at, there is still too much supply on the market.  As long as housing supply outpaces demand, we are going to see a decline in home prices.  To make matters even worse, the 10 year treasury looks to be getter very close to support levels which means we could see a strong short term uptrend soon.  If the 10 year uptrends, you can be sure that average mortgage rates will follow.  This means that home prices will come down even more.

The 125% loan-to-value refinance plan will help many to refinance, but overall I do not think it will help the overall housing market or the economy.  Big time job losses were reported this morning and I will have much more to come on that issue….

When deciding to refinance getting the best rates available is extremely important.  One of the top searches on google for refinance is “refinance best rates.”  The best rate that you can get is solely based on your current financial status.  If you have a very good credit score and your home has increased in value since you bought it, you are likely to get a lower refinance rate than home owners who do not have that luxury.  I would strongly suggest you get a very up-to-date appraisal value before you think you owe less than what your home is worth.

Another thing to consider when looking for the best rates when refinancing is the closing costs.  If you are not going to better your current mortgage rate by at least one full percentage point, it is often not worth it to refinance due to the closing costs.  I would imagine that some of these closing costs have gotten a little out of hand with the current economy.  Mortgage lenders are doing everything they can to make a few extra dollars, so adding a few administrative fees onto a mortgage would not surprise me at all.

Overall, the best refinance rates are dependent on your financial situation.  If you feel you have done very well in making sound financial decisions, you could get an extremely low rate that will save you thousands of dollars over the course of a mortgage.

Overall, mortgage rates are still well below where they were a year ago, 6.09%, but a jump like this has been very disturbing to the American public.  As I pointed out earlier this week, there has been a surge in google searches related to mortgage rate predictions, weekly mortgage rates, mortgage rates going up or anything the like.  The sentiment for the last six months has been that mortgage rates are going to continue to go down because the overall long term trend is down.

That was all fine and dandy until free markets finally started to work.  The government had created artificial mortgage rates for quite some time as they were buying back mortgage backed securities and utilizing the Making Home Affordable plan to help home owners refinance as well as get low mortgage rates for first time home buyers.  With all of these factors being the case, even with low mortgage rates, home prices continued to fall.

This leads me to a very disturbing point.  If home prices continued to fall even when mortgage rates were under 4.8% what is going to happen if mortgage rates work their way back up to 6%?  Well, honestly, the same thing that has been happening since June of 2006; home prices are going to continue to slide.  There are several markets in the United States that have remained strong through this economic downturn but that is likely to change if mortgage rates continue to jump.

Another unforunate factor with mortgage rates moving higher is that many home owners have not gotten a chance to refinance.  Not that rates are back above 5% I will be willing to say that many home owners who were debating getting a refi will no longer even consider it a possibility because the costs are going to outweigh the savings now that rates have moved up.  Even if there will be some savings by refinancing, some homeowners do not want to go through the process especially if their home value has fallen.

Overall this is a very tough week for the housing market.  You may here analysts on CNBC or FoxBusiness saying that higher mortgage rates did not hurt the housing market but use common sense.  If extremely low mortgage rates did not help home prices, it is obvious that higher rates will not be of any assistance.

Once again, this sounds AWESOME in theory, but it is just not happening.  For those of you that want to refinance, you are probably not aware of the fact that the value of your home has greatly decreased.  If there have been any foreclosures or short sales in your neighborhood, you can expect the value of your home to be as much as 20% less than you expect.  It is hard to swallow this truth, but it will be much easier if you accept it now rather than getting upset after you see your appraisal value in the refinance process.

Unfortunately there is not much you can do unless you have some money laying around.  The best option for you is put a huge chunk of change into your home so your loan-to-value ratio is closer to 70% rather than in the triple digits.  If you hope to refinance with a loan-to-value ratio over 95% you can expect to get a rate MUCH higher than the advertised rates of under 5%.  It is discouraging, but it is the truth.  The only home owners who are going to benefit from the Obama Refinance Plan are those who have been in their homes for many years and have paid off a great deal of their mortgage.

If you are a young home owner, less than five years, it is not likely that your refinance rate will save you that much money.  There is no harm in trying, but it might end up being a waste of time.  If you do want to refinance, make sure to apply to more than one mortgage lender.  You never know what financial situation some of these companies are in and some of them may be desperate enough to give you the deal of a lifetime.

Make sure to check in with Subprime Blogger every Sunday as I post my weekly Refinance article.  Bookmark the link below to access the content easier.

• Refinance Sunday

If your current mortgage rate is over 5.75%, refinancing today will greatly benefit you.  I do have a word of caution for some of you who have homes in “bubble” markets.  If you do not have 20% equity in your home, it is very unlikely that mortgage lenders will give you a rate even close to those being advertised.  Unfortunately, most lenders still have the subprime mortgage crisis fresh in their memories and they are not willing to lend money to anyone who would be considered a risky borrower.  Their whole business model may faulter if they go out on a limb and do this.

You will be able to get a refinance if you do have less than 20% equity in your home, but it might not be a wise decision if your mortgage rate is already manageable.  There are many sites that offer mortgage calculators that will assist you in making the best financial decision for your situation.  The best mortgage calculator on the internet is available here.  For those of you who are “numbers” people, you can crunch the numbers all day on these calculators.  Ultimately, you will not know how much you will save until you apply for a refi.

When you decide to refinance, it is advisable to make sure you have a credit score from at least three credit agencies.  Experian.com charges a reasonable rate to access your credit score from three different, reputable agencies.  I would suggest you check your score at least once a year if not more.  You may not realize some of the credit companies that show up on a credit report in an economy like this.  I have several friends that have found collection agencies reporting unpaid dues to their credit report.  If you have not accessed your credit report in the last year, this may very well have happened to you and you do not know it.

After you have a credit score in hand, you will know what kind of financial leverage you have.  Once again, you need to make sure you have 20% or more equity in your home.  If you have not had your house appraised in the last month, you need to get it done now.  It is highly possible that the value of your home has decreased.  Even in areas that were thought to be recession proof have seen 20% to 30% declines in home values from the peak.

If you have the opportunity to refinance under 5% with a no appraisal refinance, go for it!  I cannot urge you enough to jump on this opportunity.  The biggest issue that borrowers are having with the current refinance process is getting through the appraisal step.  If you can skip that step, consider it a gift.  For any of you who have gotten a refinance with no appraisal, please comment on this article and let us know how you got this opportunity and how it went.

• Mortgage Rate Predictions
• Mortgage Rates Trends
• Refinance Sunday

Back in November, in the article “President Obama, Please Take Note” I wrote

Find a way to stop Ben Bernanke from printing United States dollars.  I am not an economist, nor will I ever claim to be, but the first thing I learned in Economics 205 in college was the law of supply and demand.  The greater amount that is provided of a good or service causes that good or service to be demanded less, therefore the price declines.  If we continue to print US dollars and going deeper and deeper in debt, it is only logical that the United States dollar will continue to decline.

While the value of the dollar has yet to greatly decrease, it is inevitable that it will happen.  Not only will the value of the dollar decrease, we will see HYPERINFLATION as the price of gold, silver and other commodities will skyrocket.

These actions by the Fed are sure to push mortgage rates to the low four percent range.  It is also likely that we will see a refi boom as those with a current mortgage rate above 5.5% will save a great deal by refinancing with Bernanke mortgage rates.  The ultimate problem with these actions are that this is horrible monetary policy!  Keeping mortgage rates historically low will only encourage Americans to buy on credit.  Buying on credit is exactly what got us into the mess we are in.

This country needs to learn to stop buying on credit, but how can we when the government encourages us with artificial interest rates?  Ultimately, the only way this country will get out of the current economic crisis is to create jobs.  Does buying treasuries and mortgage backed securities create jobs?  Maybe a few for the people that take the money out of the printing press, but thats about it.

Lower mortgage rates will definitely help people to save on their mortgage payments; I will never argue that.  The problem remains that only the financial responsible and well off are going to understand how to refinance at these lower rates.  Today, Jim Cramer said that he just got off the phone with a mortgage broker and was able to drop his rate by a point and a quarter.  Do you think that Jim Cramer really needs the extra cash?  Of course not, but these are the types of people who are going to save on their mortgage; not the individuals who are likely to be foreclosed upon.  Those who are struggling financially are in that circumstance for a reason!  They are financially illiterate!  No matter how much money you put into their pockets, they will find a way to spend it while getting no return.

• Savings, NOT Credit, is the Lifeblood of a Healthy Economy President Obama
• Obama’s Making Home Affordable Program WILL Help You Refinance
• Best Prediction of the Stock Market and Economy – Unemployment Rate