If you haven’t had your eye on mortgage rate trends, you may not be aware of the recent dramatic dips in rates. May 2011 has seen some of the lowest mortgage rates in years, and experts are predicting that rates will go back up soon. With mortgage rates so low, those positioned to buy homes or refinance may want to act now, before rates go up again.

How Important is a Mortgage Rate?

Your mortgage rate can cost or save you thousands of dollars over the life of your loan. To get an idea of how much you can save use a mortgage rate comparison calculator to determine how much you’d benefit from buying or refinancing now. You can use this calculator to compare your current interest rate (if you already own a home) with a potential refinancing mortgage rate, or you can use this calculator to determine how much buying now (at current available rates) will save you if rates go up. You’ll quickly see that a low interest rate is an incredibly valuable factor to consider.

How Can You Determine What Rates Are Available Today?

For quick and easy lender rate comparisons, check out this current lender rate tracker, which is updated daily. Remember: these are the rates published for the general public. You may be offered very different rates, since the rates a lender will make available to any particular borrower vary according to credit score, credit history, and type of loan desired.

How Good (or Bad) Are Today’s Mortgage Rates?

As of June 2011 mortgage rates are incredibly low. To get an idea of how low mortgage rates are in comparison to past years check out these mortgage rate history charts. To read these charts, find the line that shows the trends for your loan type (you’ll see both fixed-rate and adjustable rate loans, plus loans with differing term lengths), and check out how rates have trended over the past twenty years. You’ll see rates are pretty low right now (in some cases, they are at all-time lows).

Should You Buy (or Refinance) Now?

If you have some time before buying, you may want to track local mortgage rate fluctuations for a while to see what the latest trends look like. You can do this by using local current mortgage rate trackers, which will always give you up-to-date information about the latest available mortgage rates. Keep in mind that individual lenders may offer slightly higher or lower rates than those published, depending on your credit rating and the lender’s current offer range.

What if You Want to Buy (or Refinance) Soon, But Aren’t Quite Ready?

Keep in mind nobody can predict what mortgage rates will do with complete accuracy (these charts are based off mortgage brokers’ predictions), and the safest thing to do is to lock in a rate using a floating cap. A floating cap allows you rate to go down if rates drop before your closing date, but will not go back up if rates go back up. A floating cap costs a little extra, but this is the safest rate lock method available for those who have some time before closing. Some floating caps can be locked in as far as six months in advance. Check with your lender for details.

What About Points? Can You Buy Down the Mortgage Rate?

Some lenders will allow you to buy down the interest rate even further by purchasing points. To determine if buying points to lower your interest rate is worth the cost the lender is charging, use this points calculator beforehand. In some cases, you can even deduct the money you spent on buying points from your taxable income, although you’ll have to check with tax code laws to determine if your situation applies.

Mortgage Rate Conclusions

In short, low mortgage rates usually benefit those who choose to buy or refinance. If you suspect your current mortgage rate is higher than average, you may wish to check into the following while rates are still low:

• refinancing
• buying your first home
• selling your existing home and buying a new home