Washington

A plunge in mortgage rates is giving homeowners a rare opportunity to lock in a 15-year fixed-rate loan for less than 4 percent.

Rates haven’t dipped this low in decades. For those who can qualify, it is the chance to pay off a home in half the time while saving tens of thousands of dollars — if not more.

But the lower rates on short-term loans are not likely to ignite the refinancing market. Most people can’t afford the higher monthly payments required by a 15-year fixed mortgage compared with a more traditional 30-year loan.

“That’s not what most people need right now. They need lower payments,” said Leif Thomsen, CEO of Walpole, Mass.-based lender Mortgage Master Inc.

High unemployment, slow job growth and tight credit have hampered the housing industry. And fewer people are also in position to refinance, because low real estate prices have left many with little equity in their homes. Many people who would qualify have already refinanced in the past year.

The average rate on the 15-year fixed loan dropped to 3.95 percent last week, according to mortgage company Freddie Mac. That is the lowest on records the company has kept since 1991. The average rate for a 30-year fixed loan fell to 4.49 percent. Rates haven’t been that low since the 1950s, when longer-term mortgages typically lasted 20 to 25 years.

There might not seem to be a huge difference in the two rates, both of which are historically low. But consider the savings on a $200,000 mortgage over 15 years at the current rates.

A borrower who refinances over that term could expect to save $65,000 in interest compared with the 30-year fixed loan. Still, they would pay $1,474 a month before taxes and insurance. With the 30-year loan, the payments would be $1,010 a month.

Rates on five-year adjustable-rate mortgages averaged 3.63 percent, down from 3.76 percent a week earlier.

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

The effort, called the Uniform Mortgage Data Program, sets standards on data and collection processes. The FHFA previously directed Fannie and Freddie to create common data sets and standards for electronic submission and loan delivery data.

“This initiative is a major step toward meeting industry requests for uniformity in appraisal and loan data,” said FHFA acting director Edward DeMarco in a statement (download here). “Improvements in data quality will benefit all mortgage market participants and strengthen the housing finance system.”

The closing costs include fees for origination, attorneys, appraisal and inspections, title search, title insurance, credit reports, and more. Down payment assistance is not included as a closing cost.

If you are thinking about buying or selling a home please contact me for specific details and how this change can impact your real estate transaction.

The Obama administration effort, known as Home Affordable Refinance Program, had been scheduled to end on June 10 but will now run out on June 30, 2011, the Federal Housing Finance Agency said Monday.The program allows borrowers who owe up to 25% more than their homes are worth to refinance to lower interest rates.It was originally projected to help 4 million to 5 million homeowners with loans owned or guaranteed by Fannie Mae and Freddie Mac. So far, it has helped around 220,000, according to the Treasury Department.

Let me know if you are interested in refinancing and I can get you to a qualified lender who can help with this.sr

Price: $399,900

 Bedrooms: 3

Bathrooms: 3 Full, 1 Half

 Garage: 2

 Square Feet: 3,024

 MLS ID: 933034