The Bridgewaters, Massachusetts

The number of applications for refinancing existing mortgages is rising as interest rates are falling. Mortgage applications have risen to a 5 year high. According to the Mortgage Bankers Association, the index of applications to purchase a home or refinance a loan rose to 1,245.7, the highest level since 2003.

In November 2008, the Fed announced a program to purchase up to $500 billion in mortgage backed securities to help reduce the cost and increase the availability of credit for homebuyers. Mortgage rates dropped on the annoucement just before Thanksgiving. The Feds began their MBS purchase program on January 5th of this year, and mortgage rates have dropped more since then.

The average rate for a 30-year fixed-rate mortgage dropped to 5.03 percent, the second-lowest level since records began in 1990. The average rate for a 15-year fixed mortgage dropped to 4.79 percent, the lowest level since March 2004.

You will see mortgage rates drop to historic lows, and lenders will be swamped with mortgage applications. I encourage you to apply for a mortgage somewhere - anywhere - now, and get the process started. You don't have to lock in a rate today - you can always float and lock in later. If you do, you'll be in a better position to lock in when the rates do drop again and not miss another opportunity for a great low rate.