Just this week the Federal Reserve decided to put in $1.25 trillion into mortgage-backed securities in order to try and bring down mortgage rates. The overall goal of this plan is to help make home buying more affordable for everyone while at the same time help boost the housing market. However, this will be a short lived program since the money is set to run out in spring 2010.
After the money was inserted into the market this week the average interest rate for a 30-year mortgage, published yesterday by Freddie Mac, dropped to a record low of 4.71 percent. That is the lowest rate recorded since the mortgage finance company began tracking interest rate data since 1971. The last record low for a 30-year mortgage was 4.78 percent which was set during the last week in April of this year and was matched last week.
Regardless of how much help there is from the government, qualifying for a home loan is still very difficult particularly since lenders have really tightened their standards. Therefore, only those with solid credit with a great credit score and who have the ability to pay a 20 percent down payment on the loan will get the best rates are available.
Greg McBride, senior financial analyst at Bankrate.com said, "There are no guarantees that mortgage rates are going to stay at these low levels."
Also according to Freddie Mac, 15-year fixed mortgage rates fell to a record low this week to 4.27 percent down from 4.29 percent from last week.
All of these great interest rates have spurred homeowners and buyers alike to look into refinancing and as a result mortgage applications rose 2 percent last week.