American consumers are notorious for wanting the best deal, so when borrowers tell you they are waiting to get the lowest mortgage rates we should not be surprised. With 30 year fixed rates falling below 4% last month, we may have found the bottom of the mortgage rate graph.  Since then, home loan rates have teetered back and forth, but all signals point towards a trend of rising rates in 2011 and beyond.  Of course if the economy continues to sputter you could expect low mortgage rates, but it is doubtful we will see the 30 year fixed rate mortgage below 4% anytime soon.  The fact remains that the lowest mortgage rates in 2010 can be attributed to the Federal Reserve and the U.S. Treasury buying the bad credit mortgage portfolios from banks and lenders even as the default rates were rising.

Will Mortgage Rates Get Lower?

A few mortgage lenders are offering the fixed 10 year mortgage in the 3.5% range, but how many Americans have the ability to afford the higher payment that comes with a ten year amortization schedule?  The 15-year fixed mortgage is a bit more realistic and great choice for those borrowers that can see retirement in the near future. Still with the writing on the wall, why are do so many Americans continue to wait for mortgage rates to get lower?  

According to BofA’s, Jeff Moran, “A lot of people have been rejected from loan refinancing or home buying in the last few years, so many of these people may be a little tentative about facing the scrutiny of a mortgage lender.  Moran continued, “Many consumers were taken back by the tighter guidelines for home loans and many applicants simply do not meet the new requirements for refinance or home purchase loans.”

The bottom line is that waiting for rates to fall again is very risky.  When you look at a thirty year graph highlighting the trends of mortgage rates you can see that it is far more likely that rates will rise than they will fall.  Borrowers waiting on the sidelines for lower rates for home financing could be waiting for decades. Still many consumers appear to be just fine sitting on the sidelines, waiting for lower mortgage rates to appear.  Nobody knows for sure, but if you have the ability, I suggest locking into a mortgage that you are comfortable sooner rather than later.