Conventional, VA and FHA mortgage rates remain at very low levels which are good news for homeowners seeking mortgage refinancing or new home buyers seeking affordable financing.  The thirty year fixed mortgage rates averaged 5.22% for the week ended Thursday, down from last week’s 5.25% average and 6.52% a year ago.  Interest rates on 15-year fixed-rate mortgages home loans were 4.63%, down from 4.69% last week and 6.1% a year earlier. Mortgage rates declined slightly this week after rising up last month, according to Freddie Mac’s weekly survey of mortgage interest rates. After dropping to record levels earlier this year, rates on the benchmark 30-year fixed-rate mortgage rose back above 5% as Treasuries gave up some of their gains and home buying activity picked up. Higher Treasury yields generally result in higher mortgage rates.

Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 4.73%, down from last week’s 4.75% and 6.05% a year earlier. One-year Treasury-indexed ARMs were 4.78%, down from 4.8% last week and 5.22% last year.  To obtain the interest rates this low, the fixed rate home loans and the five-year ARM rate will cost about 0.6 point and the one-year ARM required an average 0.5 point.

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Yes the Obama administration and the local governments are making every effort to lower the mortgage rates to stimulate the housing sectors nationally, but the higher home loan amounts and refinancing fees do not make it attractive for consumers on the sidelines waiting for the mortgage rates to slide even more. FHA mortgage rates have dipped back to 5% on fixed thirty year mortgages, but jumbo mortgage loans remain a full 1-2 percentage points behind the government refinancing options.

Bloomberg reported in a recent article that mortgage fees may become making it harder for people to seek refinancing. However, it is expected that the mortgage refinancing will hit a two year high. I am kind of contradicting myself, am I not? “David Rapaport, a professor at the University of California San Diego Medical School, is paying an upfront fee of $3,500 to refinance his mortgage at 5.13%. A year ago, his rate was 6.25% and there were no fees. “I’m happy just to be able to get a refinance and lower my mortgage payment,” said Rapaport, 57, who owns a 2-bedroom townhome in San Diego, where home prices have dropped 32% since June 2006. He is saving $264 a month with the new mortgage from CMG Mortgage, meaning it will take about a year to recoup the fees he paid.”  The Chicago Sun warned that homeowners need to be careful when getting a refinance loan.

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