Refinance your mortgage now: there's still time to take advantage of the lowest home mortgage rates in 30 years - Real Estate

If you shop around, you can find many lenders that provide zero-cost financing to consumers, although they then charge a slightly higher interest rate on the loan. For example, a borrower refinancing a $150,000, 30-year, fixed-rate mortgage at 6% would have a monthly payment of about $899.33, with out-of-pocket expenses of roughly $3,000. But by increasing the rate by 0.25%, the lender could agree to pay 75% of the closing costs. That would leave the borrower with a monthly payment of $923.58, says McBride.

Perhaps the important thing to consider, if you're planning on living in the home for a long period, might be to pay cash for out-of-pocket expenses to get a lower rate and monthly payment. That way you can enjoy the savings over a longer period of time. But if you only plan on living there for two-to-five years, it might make more sense to take the higher rate and payment by financing the closing costs into the loan. Financing those expenses into the mortgage might be particularly worthwhile if the refinanced loan is more than a full percentage point less than the current rate.

USE YOUR GOOD CREDIT FOR A BETTER RATE

Borrowers with good credit ratings have the most leverage to bargain for the best rates. Those with credit blemishes, including such obstacles as bankruptcy, can still refinance, but likely at higher rates. Some borrowers with bad credit have options that may allow them to refinance. For example, some lenders allow consumers to obtain home loans or refinance mortgages on the basis of assets rather than credit rating. But because of the increased credit risk, these borrowers should be prepared to pay higher rates.

DON'T GAMBLE THAT RATES WILL FALL FURTHER

There is still time to refinance if you haven't already. U.S. consumers who have refinanced since 2001 have already reaped $274 billion in interest rate savings alone, says Zandi of Economy.com. But don't delay. Mortgage rates could move higher in the second half of this year, when many economists predict the economy will improve.

Remember that lenders still have a huge backlog of refinancing traffic so the closing process could take longer. "You should do it now because you don't want to be on the tail end of that backlog and roll the dice that rates won't move higher," says McBride.

Refining Resources

If you're looking to refinance your current mortgage, Otis T. Harper II, senior mortgage officer for United National Mortgage Corp., says it's best to take a proactive approach. "With mortgage rates so low, you can call any lender and it should have a number of products or programs that you can benefit from."

There are a number of Websites that can help you find the best rates on refinancing in your area. They typically ask you to fill out an online questionnaire to help determine the type of loan that suits you. Then, within 24 to 48 hours, they promise to provide a list of lenders who are interested in refinancing your mortgage.

* Loanfight.com gives three rate quotes from lenders within 24 hours of filling out a questionnaire.