Mortgage Rates at Record Lows

The average interest rate for a 30-year mortgage dropped to a record low of 4.71%. The rate, published this week by Freddie Mac, is the lowest since the mortgage finance company began tracking the data in 1971. The previous record of 4.78% was set during the week ending April 30, 2009, and matched last week's rate.

An aggressive Federal Reserve campaign to reduce borrowing costs is pumping $1.25 trillion into mortgage-backed securities to try to bring down mortgage rates. The goal of the program is to make home buying more affordable and keep the housing market afloat.

The low rates are a boon to first time home buyers who can qualify for a loan. The average rate on a 15-year fixed-rate mortgage fell to a record low of 4.27%, from 4.29% last week, according to Freddie Mac.

Qualifying for a loan is still tough, though, as lenders have tightened their standards. The best rates are available to those with solid credit and a 20% down payment.

"There are no guarantees that mortgage rates are going to stay at these low levels," said Greg McBride, Advertisement senior financial analyst at Bankrate.com.

Millions of American families who already have mortgages have not been able to take advantage of them. About 11 million households, or nearly 1 out of every 4 homeowners with a mortgage, owe more on their home loans than their house is currently worth. That makes refinancing difficult.

The federal Home Affordable Loan Modification Program, which aims to stem foreclosures and help more people to remain in their homes, will soon be expanded which may help with some of the trouble. Wells Fargo will also soon be working at a local level to reduce foreclosures in the Twin Cities.

So it's a great time to buy and an excellent time to refinance if you haven't already!