Should you refinance your mortgage?

Mortgage rates are at an all-time low but should you consider refinancing?

Interest rates on 30-year fixed rate mortgages fell for the sixth straight week, according to the rates tracked by the Mortgage Bankers Association. The Bankrate.com numbers are at the lowest, or closest to, since the company began tracking in 1985. The week of Dec. 2 shows the 30-year fixed mortgage with no points down to 5.01. This is up 5 percent from the week before, however down from 5.97 percent from last year.

The 15-year fixed mortgage rate hit 4.46 percent, down from 4.47 the week before.

Why so low? According to Greg McBride, Bankrate.com’s senior financial analyst, it's a combination of things. The Federal Reserve hasn't given any hints that they are going to increase short-term interest rates. Investors and foreign central banks are continuing to consume debt issued or guaranteed by the United States government at a steady pace.

McBride says, “Today’s record low mortgage rates represent an opportunity for homeowners to refinance at lower fixed rates or to trade out of an adjustable rate mortgage before an inevitable increase in rates and lock in permanent payment affordability.”

McBride points out that there is a "window of opportunity" to refinance, and it will not be available for long, and the government program being offered is soon to end.

A New York Times article reports that these low rates come as many homeowners are finding themselves owing more than their house is worth and are having much trouble making payments.

Looking for a loan modification program? Check out the Home Affordable Refinance Program. The government-sponsored program is set up to help homeowners in serious trouble gain more affordable monthly mortgage payments. The loan is only available until June 2010, and there are specific qualifications. See if you qualify here.

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