With the record low mortgage rates available to consumers these days, there has been quite a surge in mortgage applications arriving in the offices of banks and mortgage lenders in recent months. According to the Mortgage Bankers Association, the number of mortgage applications has actually increased by about seven percent. Even with that surge, however, the number of applicants is still below the numbers from the first part of last year. Currently, the average mortgage rate for a 30-year fixed rate loan has dropped to an unbelievable 4.58 percent. That’s the lowest rate recorded since Freddie Mac began keeping track in 1971.

Applications for new mortgages were not the only number that increased last week, though. There was a nine percent jump in the number of applications for existing homeowners to refinance their homes. That’s the highest number of refinancing applications since mid-2009. One number that fell, however, was the number of new mortgages that were taken out. That dropped two percent.

One of the reasons that the mortgage rates continue to fall is due to the anxiety and nervousness surrounding Europe’s financial situation. The overall global economy is also making the Feds nervous as rocky and shaky as it is right now. As a result, investors have been shifting large amounts of money into Treasury bonds, which are safer than their normal investments. This has caused yields on the bonds to fall and the long-term fixed mortgage rates typically reflect that drop.

In all, nearly 80 percent of the total applications last week were homeowners applying for refinancing. That’s the highest it’s been since April of 2009.

One of the most difficult things for self-employed people to do is to secure a mortgage loan. But with the low rates these days, many of them are trying to get mortgages and take advantage of this buyer’s market. It is often difficult for self-employed people to prove their income and show that they are financially stable which makes them unattractive to lenders. But here are five tips you can consider if you are self-employed to make the mortgage process easier for you.

1. Save a large down payment. The larger your down payment is, the more attractive you become to lenders for a mortgage loan. This is because you have more invested in the home so the banks assume that you are less likely to just walk away from it if you get into some financial troubles. Many homebuyers put up at least 10 percent with many of them putting up 20 percent. If you can exceed that figure, you should be in good shape financially.

2. Keep a well-stocked emergency cash fund. On top of having a large down payment, you should also have a good amount of money stored away in an emergency fund. This puts the lender at ease because it shows that you have options in case your business begins to fail. It also shows that you are responsible with your money.

3. Improve your credit score. For any type of loan, your credit score is going to be a part of the decision making process on the part of the lender. If you plan on getting a mortgage six months or a year down the road, start paying your bills on time and paying down your debt right now. By the time you apply for a mortgage loan, you could increase your credit score significantly and get a better rate as well as become a more attractive borrower.

4. Pay off debt. This goes along with increasing your credit score, but you should focus on the debts that you can completely pay off. The fewer monthly bills you have, the better your situation will look to lenders. You may even qualify for a larger loan since you have more money each month that you can apply towards the mortgage payment.

5. Show the paperwork. Self-employed borrowers need to show a lot more paperwork than other types of borrowers because they have to prove that their business is stable enough to make the mortgage payments each month. W-2 forms, balance sheets, profit and loss statements and anything else that shows your track record of income will help make your case. Keep all of these types of documents in order so you can show them to the potential lenders when applying for a mortgage.

It is not entirely impossible to get a mortgage loan if you work for yourself. But with the subprime mortgage debacle and foreclosure rates, banks are protecting their money more than ever. It is up to you to show that you are a good financial risk and that you will make your payments each month.

More and more homeowners are packing up their belongings, mailing their house keys to their mortgage lender and walking away from their home mortgages. Many of them simply think this is the best thing they can do financially, psychologically and emotionally. However, they are caught up in the moment and they are not thinking straight. Walking away from your mortgage can have many consequences that you do not even think about. Of course, it may be the only option for some homeowners. But if there are other options, consider the consequences of choosing to walk away.

Credit Damage
If you walk away from your mortgage without paying it off, it is almost certain to have a huge impact on your credit. This impact will be on your credit history for several years. You probably won’t be able to get another mortgage loan for as long as this incident shows on your credit so you will be forced to rent or consider other options.

Owing Money Anyways
When you walk away from your mortgage, you can’t just wave goodbye to your financial obligation. You may try, but the lender is going to pursue you for the money you owe. Even if the lender sells the home, it will likely be sold for less than what you owe and you will still be responsible for the difference. In addition to that, there will be fees, penalties and other charges to make up for the legal expenses, late fees and anything else that the bank had to pay in order to sell the home.

No Help
Once you walk away from your mortgage, you no longer qualify for financial assistance to pay your mortgage payments. If you are stay in your home, however, the government is providing a number of programs to help you make your payments. Whether it is a loan modification or some other program, homeowners who decide to stick it out will receive advice, counseling and even money just to stay in their homes. Banks and lenders will even work with you if you talk to them at the first sign of financial trouble. If you simply cannot afford to pay your mortgage any longer, you may be able to work something out where you turn the property over to the bank without getting the dreaded “foreclosure” stamp on your credit report.

Before you walk away from your mortgage and your home, be sure you have considered every other available option first. Have you talked with your mortgage company to see if they will work with you? Have you contacted your state and local government to find ways to help you pay your mortgage for a short time until your financial situation improves? Have you asked friends and family members for short-term loans to help you stay in your home? Walking away has such negative long-term effects and it should not be a decision you make lightly.

Average 30-year mortgage rates dropped to 4.76% according to BestCashCow/Informa data. That's down from the high of 5.20% in early April. Homebuyers and homeowners looking to refinance can thank the European debt crisis for the drop below 5%. European debt fears have sent a wave of cash into Treasuries, driving down the 10 year note. The 10 year note is the benchmark used to set 30 year rates and it is now bumping around at its low for the year.

Other mortgage rates have also come down. The 15-year fixed rate mortgage dropped to 4.22%, down from a 4.52% in early April. Five-year ARMs are at 3.72% versus 4.05% in early April.

What Does This Mean for Homebuyers?

I've been following actual rates, not just averages for a 30-year fixed rate loan in Massachusetts with 0 points ($200,000 loan) for the past four months. In April the rate shot up to 5.125%. Six weeks ago it was 4.875%. Five weeks ago it's 4.625%. Today, it remains at 4.625%. What has changed are the number of banks offering a 4.625% rate. Several weeks ago just one bank did with $1,995 in fees. Now several banks are offering this ratge and CapWest Mortgage is only charging $397 in fees.

View mortgage rates by state and zip code.

Owning your own home has many benefits, especially now that you can take advantage of historically low mortgage rates. Despite what some may say about renting a home or an apartment, there is just something about buying and owning your own home that is unmatched to paying rent to a landlord. You may have heard arguments on either side of the issue and you may have some reservations about jumping into the housing market because of the commitment or some other reason. However, we are going to provide you with four great advantages that home ownership has for you.

Pride
Few feelings match the feeling you get when you walk around a home that you actually owe. Even if you are in your first few years of making your mortgage payments, it feels better to live in something that you will actually own one day. You can paint your walls any color that you choose and turn up your stereo without worrying about your upstairs neighbors calling the police on you. It also provides a sense of stability and security for your family that an apartment simply does not offer.

Investment
The real estate market fluctuates up and down. However, if you own your home for several years, there is a good chance that it will go up in value. This means that if you decide to sell it years after you buy it, you will probably make a profit on it. The more payments you have made on your mortgage, the more equity you have built up and the more you can put in your pocket if you ever decide to sell it. With an apartment, you are simply paying out money each month and it never goes toward any type of future investment.

Tax Incentives
When you own your own home, you can claim deductions for your property tax and your mortgage interest. Our tax system is designed to encourage home ownership so you can actually get more back each year when you file your taxes.

Privacy
When you live in an apartment or a rented home, the property manager may have access to your home. Even if it is illegal or against the rules in your state, you may still have it in the back of your mind that they can enter your home when you are not around. When you own your home, however, you can take the proper precautions to keep unwanted visitors out of your home, such as installing an alarm system, extra locks and other deterrents.

These are just a few things to consider when deciding if you would rather buy a home or pay rent every month. Even with all of these benefits, though, you should always be careful when making your decision. Buying a home is one of the most major decisions you will ever make so taking the time to research it and find the one that is right for your family will help make the experience as pleasurable as it can be.

Last week, the Justice Department arrested more than 500 people who were involved in mortgage scams. The action was described as a “nationwide takedown” of those who were perpetrating mortgage scams which were mainly aimed at the homeowners who were already having financial difficulties in paying their monthly payments.

The authorities – both state and federal – have been able to recover more than $200 million for victims of these mortgage scams through civil and criminal court cases. However, that is merely a drop in the bucket compared to the $2.3 billion that has been lost through hundreds of cases and homebuyers who have fallen victim to these fraudulent practices. Attorney General Eric Holder has stated that the scope of the fraud is “truly astonishing.”

One former mortgage broker – Michael Fiorito – has been sentenced to more than 20 years in prison because he played a major role in a mortgage scam that resulted in homeowners losing more than $400,000. They thought they were refinancing their homes through his company, but they were instead tricked into selling their homes. According to the Justice Department, Fiorito told the homeowners that they would receive a home equity check. Instead, Fiorito either intimidated them into signing the checks over to him or he would get the checks before the homeowners even saw them.

According to reports, the reports of suspicious activity relating to mortgages has gone up by about 5 percent for the 2009 fiscal year. As a result, the FBI has been putting more efforts into solving the problem. The number of investigations into mortgage fraud by the FBI has gone from 1,200 for the 2007 fiscal year to over 3,000 this past year. The Obama administration has even jumped into the fray with the Financial Fraud Enforcement Task Force in an effort to coordinate the local, state and federal efforts for prosecuting those involved in financial scams and misconduct.

Investigators have gone undercover to help flush out the mortgage scammers. In one instance, a tax preparer from New York was working as an informant for the FBI for 11 months. He would produce fake documents like tax returns and check stubs and then sell them to various mortgage brokers, realtors and lenders. In another case in Miami, two people were caught advertising fraudulent mortgage services to Haitian-Americans which resulted in $4.4 million in losses.

If you are in financial distress, don’t just jump at the first person or company that wants to help you with your mortgage difficulties. If you are unsure if you are being led astray, find out more by visiting www.stopfraud.gov. And if you think you are being defrauded, contact your local authorities right away to begin legal action and minimize your losses.

Buying a home is probably the largest investment you will ever make. It is a life-changing decision so it may be difficult to get yourself into the proper mindset for buying a home. Even though mortgage rates are low right now, it may not be the best time for you personally. Here are some ways to tell if you are ready to become a homeowner.

Do you conform to the market?
In order to become a home buyer, you have to have realistic expectations about the real estate market. You cannot say all the homes are overpriced and refuse to buy a home because of that. Home buyers accept the current market values and they will pay what it costs to purchase a home rather than make excuses about the price.

Do you have enough savings?
Before you purchase a home, you should have some savings built up n case of an emergency. Many financial advisors suggest that a new home buyer should have at least three months of mortgage payments saved up in the bank at all times. This helps in case you lose your job and need some time before finding another one. If you have a few months of mortgage payments in the bank, you will still be able to pay your mortgage while you are unemployed which will relieve some of the stress in the situation.

Do you have the resources needed to maintain a home?
One of the great things about living in an apartment or rental is that all you have to do is call the property manager if something breaks down or if there is a problem where you live. But if you own a home, fixing the appliances and maintaining the various aspects of the home is completely up to you. You either have to do it yourself or be able to pay someone to do it for you. Do you have the time to mow your lawn, replace your furnace filters and do repairs? This is a major consideration when determining if you are ready to purchase a home or not.

Have you been working at your job for at least two years?
When applying for a mortgage loan, lenders want to see that you have a stable job history. As such, they want the borrower to be at the same job or at least in the same industry for at least two years. If you recently changed jobs because something better came along, the lender may look at the history at your previous job.