The low mortgage rates simply don’t seem to be enough to encourage new homebuyers and refinancers to take the plunge. According to reports, the number of mortgage applications that were filed last week were lower than the previous week, which is the lowest level they have been since the first part of August. This is just one of the symptoms of a flailing housing market with problems that never seem to end.

While it may seem like I am reporting only gloom and doom figures, the numbers simply do not lie. For the week that ended on September 10, applications for mortgage refinances and new mortgages were down by almost 9 percent. Typically, the monthly averages look better than the single week figures, but the four-week average for applications is still down by almost one percent. Refinance applications alone were down more than 10 percent which is the worst news of the story because refinancing has always been popular as it gives homeowners more money in their pocket that they can use to go on a vacation, improve their home or pay off debt. This extra spending goes into the economy which helps revitalize the shaky platform on which it currently sits, but there isn’t a lot of extra spending going on these days.

One of the reasons that the number of applications for refinancing has dropped is because many people who would refinance are underwater on their mortgages. This basically disqualifies them from refinancing because they have no equity to bring to the table. Unfortunately, it also prevents many homeowners from selling their home because they cannot afford to make up the difference that they owe once they sell at a fair market value.

The good news is that mortgage rates continue to stay low in this volatile market. Rates for a 30-year fixed-mortgage are averaging around 4.47 percent, which is a 0.03 percent drop from last week. Rates for a 15-year fixed mortgage have dropped to an average of 3.96 percent, which is a 0.04 percent decline from the previous week. Yet housing sales have been in a slump since the tax credit expired at the end of April and the low mortgage rates simply have not been enough to keep the sales going.

So what is the answer? It seems that the bad things that are happening in the mortgage industry are offsetting the good things. The low mortgage rates are offset by stricter guidelines and negative equity for one thing. Hopefully things can straighten out soon and all aspects of the housing industry can work for the betterment of the economy and for individual homeowners.

If you are like many other American homeowners these days, you may be looking to take advantage of the low mortgage rates these days. If you already own your home, refinancing may be an option for you so you can save thousands of dollars over the term of your mortgage loan. But before you do that, here are three things you should consider before calling a mortgage refinancing agent.

Refinance the Entire Loan

Many people refinance their mortgage, but they only refinance a portion of their mortgage. If you are going to refinance your home, include the entire amount of the loan in the refinance. By doing the entire mortgage, you have a better chance of getting the lower rates on your loan. Refinancing only part of your mortgage makes you’re a bigger risk for lenders which will result in less favorable loan terms for you.

Don’t Use All Your Equity

When refinancing, you might think it is a good idea to include all of your home’s equity in the refinance. This may be good in some situations, but it is generally not recommended. Instead, you should choose a home equity financing loan or consider applying for a home equity line of credit soon after getting the refinance loan. This gives you the opportunity to refinance your mortgage with lower rates and use the equity for something else that you may need instant cash for.

Consider Buying Points

Many homeowners do not realize that they can buy points. This means that you can put up some money upfront in order to get a lower interest rate for the term of your loan. This is typically only beneficial if you plan on staying in your home seven years or more or else you won’t recoup the cost of buying the points. To see if buying points makes sense for your particular financial situation, consult with a mortgage broker or trusted financial advisor to crunch the numbers for you before you make that decision.

Before making your final decision to refinance, always do the math and determine what the best decision is for the long run. Refinancing might seem like a good idea for the immediate future, but it may not make financing sense for the long term of the loan.

These programs and ideas to help reduce the number of foreclosures and help may seem like a good thing, but for some homeowners, they have become little more than a nightmare. Nobody knows this better than Anthony and April Soper.

This couple found themselves in trouble with their mortgage loan. They were paying $4,000 a month on their mortgage payment and they were having a hard time doing it. As a result, Bank of America, their mortgage provider, offered to put them on a trial program with HAMP. This sounded like a great idea at first. The couple could reduce their mortgage payment from $4,000 a month down to about $3,100 a month and get their finances back on track. They did everything they were asked to do under this program – they made their payments on time and everything else. But for reasons unbeknownst to them, they were not approved for the permanent modification on their mortgage loan.

That’s not the worst of it, though. Since they were not approved to be put on the permanent modification, the Sopers were now more than $8,000 behind on their mortgage payments. When they began the trial program, they were current on their mortgage. Their respective credit scores have dropped by about 100 points as a result of this and they have been threatened with foreclosure. The Sopers have filed a lawsuit against Bank of America because, as they say, the bank is to blame for the mess they are now in.

But the Sopers are not alone. There are efforts underway to find other homeowners who have found themselves in a similar situation with Bank of America. A federal judge is going to hear the case and consider joining the Sopers’ case with several others who have filed complaints against Bank of America in relation to the trial HAMP program. Bank of America isn’t the only bank that has found itself in this type of trouble, though. In fact, Wells Fargo and JPMorgan Chase have also had lawsuits filed against them for similar situations.

The growing number of lawsuits is not a good sign for the HAMP program or any other program that is being put into effect by the federal government. This particular program launched about 18 months ago and has only approved about one-third of the number of homeowners for permanent modifications. This is well below the goal it had when it first started out and these lawsuits are not going to instill the necessary confidence in troubled homeowners that is needed to take advantage of these types of programs.

Are these federal programs creating more trouble than they are worth? Or are the low numbers enough to justify putting them into action?

At a time when mortgage rates are at all-time lows, some cities in the United States are experiencing an increase in home prices. June marked the third consecutive month of increase in home prices in several cities, but many analysts are expecting those prices to fall throughout the rest of the year. One of the reasons for the jump in prices was the earlier surge in sales as a result of the first-time homebuyer’s tax credit. Buyers were jumping into the market in droves so they could take advantage of the $8,000 credit and, as a result, this drove home prices up as demands rose. In hard numbers, the home prices in the 20-city study were one percent higher in June than they were in May and more than 4 percent higher in June than they were one year ago.

Between January and March of this year, the home prices across the country dropped by nearly 3 percent. However, between April and June of this year, those same prices went up by nearly 4.5 percent. Those numbers increased despite the stricter rules that banks have on lending and the unemployment problem that continues to be a problem across the country.

Three cities where the biggest increase in home prices include Minneapolis, Detroit and Chicago. In each of those three cities, the home prices went up by about 2.5 percent.

Overall, home prices have increased by 6 percent since April 2009. However, the prices are 28 percent lower on average than they were in July of 2006 when they hit their peak. Currently, sales of existing homes are at 15-year lows and there is a huge inventory of available homes on the market. As a result, we should start seeing those prices start to go back down now that the surge of first-time buyers has subsided. This means that people who are trying to get out of their current homes will likely be slashing the prices so they can be done with them. Lenders will also be doing the same thing to help get homes off of their books.

Are the home prices low enough to encourage you to make a purchase? Or are some of you still waiting until they drop even further? With mortgage rates as low as they are, this might be the best time to buy a new home.

With the shape that that housing market is in, stories abound of people who are trying to make their mortgage payments on a home that is nowhere near what it was worth when the homeowner purchased it. One such story is that of Brenda Reed, a 64-year-old homeowner who operates a bed and breakfast out of her house. She owes about $500,000 more on her home that the actual market value and she is in danger of losing that as well as her business as a result.

But her story is not unique. There are hundreds of thousands of other homeowners in the country who are in a similar position. And the Home Affordable Modification Program (HAMP) which was designed and created by the Obama administration has not helped these people much. HAMP was designed as a way to encourage the banks and lenders of home loans to renegotiate the terms for homeowners who have fallen behind on their payments and become a risk for foreclosure. This would allow these homeowners to stay in their homes with modified payment arrangements rather than pushing them out onto the street. Unfortunately, the program has heightened the hopes of thousands of homeowners only to have them lose their home anyways while lenders and banks dragged their feet to renegotiate the deals.

In Reed’s case, her mortgage lender gave her a three-month trial period. During these three months, she was allowed to pay a lower mortgage payment while her lender decided if they should give her a permanent lower payment. Before long, however, she was “bumped” from the program and told she did not qualify for the help that HAMP offered. There are hundreds of thousands of other homeowners who have been led to believe they could receive mortgage help through HAMP only to find out that they did not qualify as well.

According to some analysts in the industry, the Treasury Department has changed the goals of the program and it has now become more or less a way for the banks to postpone the problems of delinquent mortgages. According to one General Accountability Office report, one of the main reasons for the frustrations and problems with HAMP is that the Treasury Department does not publicly announce any goals or performance information. As a result, it almost seems like the program has, at best, done very little to help the mortgage problem and, at worst, has made the problem worse.

It may be awhile before we see the long term effects of HAMP and other government programs designed to help troubled homeowners. But the way it looks right now, these programs are not the cure-all for the mortgage industry.

As mortgage rates continue to drop, many homebuyers are considering mortgage products that they may not have considered before. Currently, those rates are averaging below 4.36 percent which is prompting many people to opt for a 15-year fixed mortgage when they buy their home. For 15-year fixed rate loans, the rate is a couple percentage points below 4 percent. While this is good for some buyers, is it good for you?

During the first half of this year, more than 25 percent of the people who chose to refinance their home chose a 15-year fixed rate mortgage. That’s about a 6 percent increase over all of 2009 and nearly triple the number of people who chose the 15-year option when refinancing in 2007. These are ideal mortgage products because you can pay off your home in half the time as a 30-year mortgage and you will pay less interest over the term of the loan. In short, it’s a cheaper way to own your home.

The recent economic problems the nation has gone through has made many people rethink their debt. People want to pay off their mortgage and just be done with it even if it means having fewer dollars in their pocket each month until the loan is paid. This shift is significant as more and more homeowners are viewing their homes as safer investments than putting their money in stocks and bonds.

Before jumping into a 15-year fixed rate mortgage, however, it’s important to do that math. While you will get a better rate for choosing this mortgage product and you will pay thousands of dollars less in interest over the term of the loan, you have to be sure you can afford the monthly payments. The payments won’t be double the amount of a 30-year fixed rate mortgage, but they will be significantly higher. For instance, if your have a $200,000 loan at 4.5 percent interest on a 30-year mortgage, you would have a payment of about $1,015 per month. If you change that to a 15-year fixed mortgage with 4 percent interest, you will pay about $1,500 per month. If that’s something you can afford and still have money to pay bills with disposable income left over, a 15-year fixed rate mortgage may be the best way to go.

Of course, you have to consider your credit history when choosing a mortgage product. You may not qualify for the lowest rate and your income may not be able to support a 15-year mortgage. In this case, you can always opt for a 30-year mortgage and then reevaluate your income and your credit in a few years. You may come out ahead if you refinance after a few years once you have upped your income and cleaned up your credit.

With a record number of foreclosures in the last couple years, there are thousands of homeowners who have simply walked away from their homes and properties. In fact, there are so many people doing this that there is a term that now describes the act of someone walking away from their underwater mortgage – “strategic default.” Many of these homeowners think they are doing the best thing for their finances by essentially starting over, but these “strategic defaults” are costing them more than they think.

According to experts in the mortgage industry, walking away from your mortgage can have serious financial consequences. For one thing, the lender of the mortgage loan can come after you for the balance owed on the property. Even if the home sells after you leave, if there is a difference between the amount owed and the purchase price, you could be responsible for that difference. The bank can get judgments on your assets in order to pay for that price difference. This means they can legally come after your car, savings account and any investments you may have.

In addition to that, a foreclosure stays on your credit history for seven years. It doesn’t matter if it was a “strategic default” or a normal foreclosure, you won’t be able to get this off your history for a long time. If you try to get another mortgage loan within that time, this item is going to be a major factor in the lender’s decision to loan you the money or not. For the first few years it is on your report, it may be impossible to get another home loan. However, the damage does gradually fade the longer it stays on your history as long as you continue to make payments on your other credit accounts. According to Peter Fredman, a consumer attorney in California, Freddie Mac and Fannie Mae will refuse to give you another mortgage for the first four years following your foreclosure whether it was voluntary or not. In fact, Fannie Mae recently announced that homeowners who strategically default on their mortgage will not get another Fannie-backed loan for the full seven years following the foreclosure.

Finally, you may still be responsible for state taxes on your foreclosed home. The Mortgage Forgiveness Debt Relief Act of 2007 protects you from being responsible for federal tax liability following a foreclosure, but the states can still legally pursue for the tax money that you owe.

Before you simply walk away from your mortgage, take some time to seriously consider the consequences and all of your alternative options. You may still arrive at the same decision, but at least you’ll know it’s the best decision that you can make.