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How to Lower Mortgage Interest Rates?

Mortgage Rates Today

Mortgage rates fluctuate daily, and it would be impossible to deliver up-to-the-moment information in the context of this article. However, there are a number of mortgage calculators online that can give you up-to-the-minute information about mortgage rates today.

As of time of this writing, it's the end of August, 2014, and for the fifth time in just 6 weeks, 30-year mortgage rates have dropped across all types, including conventional loans (backed by Freddie Mac and Fannie Mae), USDA, FHA and VA loans. 30-year rates are the best they've been throughout 2014, and 15-year adjustable and fixed mortgage rates are down as well. To say the least, it's a great time for comparison shopping.

30-Year Mortgage Rates at 61-Week Best

Freddie Mac's Primary Mortgage Market Survey shows the average 30-year mortgage (fixed rate) down 2 basis points this week, to reach 4.10%. These are the mortgage rates today that are available to borrowers who are willing to pay 0.5 discount points plus full closing costs. The average 15-year mortgage rate is down 1 basis point, at 3.23%

Mortgage rates today are based on a survey of over 100 US banks that were asked to provide Freddie Mac with their rate for a prime borrower.

What is a Prime Borrower?

A prime borrower has a credit score of 740 or more, providing a down payment of at least 20%, with ample reserves and a debt-to-income ratio that meets mortgage guidelines.

Loans for prime borrowers are made against single-family dwellings, including detached homes, some town homes and attached properties, and eligible condos.

Note: The Freddie Mac Survey doesn't reflect FHA mortgage rates or VA rates. Additionally, it doesn't show the rates for USDA zero-down loans. These figures are just for conventional home mortgage loan rates.

Right now, home mortgage loan rates are at the best level this year, and the lowest since late June of 2014.

In short, it's a great time to buy or to refinance.

Low Mortgage Rates Boost Household Savings

Today's 30-year fixed mortgage rate is at 4.10%, less than half the historical average, and fewer discount points are required to get a loan over 30 years than over even the past decade. Yet, many homeowners are ignoring those low rates. Rates in the threes can be obtained, and homeowners who bought in the high fours pre-2013 would be well advised to refinance. Smart homeowners know this, and are refinancing for better home mortgage loan rates, and saving huge amounts. Others are missing the boat.

HARP loan homeowners can be even better off, and that's why the government has begun reaching out to the 667,000+ HARP-eligible homeowners nationwide, letting HARP homeowners know that they could actually be lowering their mortgage payments by as much as a third.

Whatever your loan type, it's definitely time to re-think your home financing - these amazing home mortgage loan rates aren't going to last forever, so get in touch with your lending institution and explore your options. You have nothing to lose, and likely a great deal to save.

Lower Mortgage Rates with a Loan Modification

Who wouldn't want a lower mortgage interest rate? If you're shy about refinancing, though, you might want to consider a loan modification. How does that work?

Well, first of all, you'll likely to show your loan provider that you're suffering financial hardship. And to ask another stupid question, who, in this day and age, isn't? Alternatively, you could get a bit sneaky, and tell your lender that you're thinking about refinancing with another lender, one who is providing you with a lower mortgage rate. If you can do that convincingly, your existing provider might just lower your rate in order to keep you.

Here are a few things you can try.

1. Contact an Approved Housing Counselor: Ask about your choices. Housing counselors who are approved by HUD (United States Department of Housing and Urban Development) can offer you advice on how to reduce the cost of your mortgage. They can also help when it comes to negotiating with your lender. And best of all, this service is available at no cost.

2. Take It Up a Notch: Get in touch with your lender, and then ask to speak with the Loss Mitigation Department. It's kind of the equivalent of calling a tech support line and saying "Let me speak to your supervisor!" The people in the Loss Mitigation Department have the power to reduce your mortgage interest rate. Explain to them that you're in dire straits, and that if you can't get some relief, you're not going to be able to make your mortgage payments. You will, of course, be expected to provide proof of your financial hardship, and also proof that you'll be able to make payments if the terms are modified. This will probably include bank statements, a detailed family budget including your monthly income and expenses, and a letter explaining exactly why you're struggling with making your mortgage payments. You'll also be expected to fill out some forms and sign them, and once you've done all that, your case will be evaluated. Assuming that your loan modification meets with their approval, you'll get a reduced mortgage interest rate.

3. Do the Best You Can: This means that you should still continue to pay your mortgage on time. Simply stated, it's a gesture of good faith. You're saying "Look, I'm in dire straits here, but I'm still doing what I'm supposed to do." If you can manage that, the chances are better that you'll get a loan modification. And just to sweeten the pot, if you do what you're supposed to do, you could qualify for a $1500+ government incentive under the Making Home Affordable Program, which is available to borrowers who are able to get a loan modification without going delinquent on their payments.

4. Take a Hit: Understand that a loan modification is going to show up on your credit report as a negative event. This could adversely affect you in terms of getting a loan, a rental, or even a job at some point down the road.

Warnings

Make sure that your loan modification actually reduces your mortgage interest rate. Sometimes, you end up just having the term of your mortgage extended. This reduces your monthly payments, but does nothing to reduce your mortgage interest rate.

Resist the temptation to deal with companies that purport to be able to drop your home mortgage loan rate in exchange for a payment up front. It's a scam.