Posted June 29, 2010 by Libbie Brown

how low can you go

hello out there,

Mortgages are cheaper now than ever before, with the average rate for a 30-year fixed loan being a shockingly low 4.69 percent! 15-year and 5-year loan rates are also the lowest they've been in decades! These wonderfully low rates are incredibly attractive to home buyers everywhere, but like all things beautiful and glorious- there is a blemish that we wish we could ignore!

The darker side of these low rates lies in actually qualifying to get one! Qualifying for home loans seems to be more difficult than ever before- and has a lot of folks seeing red. Essentials to qualify include job security, credit score and of course ca$h money! Criteria that many Americans have struggled with since the recession.

Combine the difficulty to qualify with the populations increased nerves over financial woes and stability- and you've got a classic too-good-to-be-true situation. Even though there are many positive signs that the worst is behind us, many are still unsure the recession is over- and as a result are continuing to be particularly cautious and reluctant. The fear over job security and financial well-being has kept many Americans timid to take the plunge, despite the attractive rates. Mortgage rates have appear to have earned the reputation of "look, but don't touch."

The FED hoped the lowest rates in decades would help boost the housing market and pump more life into the country's economy. And while these low rates help home buyers, they hurt those trying to save. Low mortgage rates translate to tiny rates for savings accounts and CDs- where people are seeing almost bare returns on their money.

Home buyers aren't the only ones reaping the benefits of low rates- current home owners can refinance their loans in order to lock in lower rates. But, there has been a major dip in the refinancing activity level- as it is less than half of what is was in 2009. Many Americans who qualify to refinance have already done so, and many more may be reluctant to refinance because the fees accumulated in doing so can be several thousands of dollars. Others may not have the equity in their home need to refinance. Despite rates being at their lowest, it's still not enough to drive some loan holders to refinance and take advantage of the historic lows.

Since the expiration of the tax-credits, it has become more crucial to give other incentives for home buyers, sellers and owners so the housing markets around the country can continue to rebound. Historic low rates are a great incentive to potential buyers, and despite the red tape, fears and cautions- many markets are seeing these rates help boost their housing markets.

In the past couple of years we have seen rates lower than we ever thought possible, and now with rates reaching a historic low many people may be waiting for yet another drop. Experts warn that waiting could result in disappointment- the FED can't sustain these rates forever, so the time to act is now. Take the necessary steps to make sure you don't miss out these rates- talk to a loan officer, your bank, or a mortgage broker STAT.

Just like all attractive deals have a darker side- they also don't last forever. Act now before it's too late and all you're left with is a higher rate and burn of regret.

til we meet again... yours truly,