A bit of a boost for mortgage seekers

10.13.08
By Lewis Green

Amid the seemingly unrelenting stream of negative news, any bright spot in the financial landscape may be cause for cheer.

For this reason, house-hunters and homeowners may read with interest that rates on 30-year and 15-year mortgages have fallen for the first time in three weeks, according to the latest figures from Freddie Mac.

On Thursday, the mortgage finance firm reported that rates for 30-year fixed-rate mortgages averaged 5.94 percent, down from 6.10 percent last week. Meanwhile, rates for 15-year fixed-rate deals declined from 5.78 percent to 5.63 percent.

Although this slight dip may not mean that you can afford the house of your dreams - or that banks would happily lend the money to buy it - but in this current housing downturn, any positive news for the market should be welcomed.

In fact, the Freddie Mac report comes in the same week as the Mortgage Bankers Association released its own fairly cheerful data. The report indicates that the volume of mortgage applications in the U.S. rose by 2.2 percent compared with the previous week.

Again, although this may not seem like much, optimists may view it as the beginning of a trend. If that is true, this may be the right time for potential homebuyers to take a look at their credit rating and devote some time to getting their finances into shape.

Financial experts recommend that you begin assessing your credit rating - from Equifax, Experian and TransUnion - about three to six months before you hope to purchase a house.

Some actions you can take to improve your credit score include reducing credit card balances, requesting an increase in your credit limit and paying off smaller loans.

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Mortgage rates have seen a slight dip