Mortgage Rates Hit Record Lows

(The Money Pros) - Mortgage rates hit all time lows with the steady decline of the 10-year treasury yield.

Although many think it is the banks that set rates, it is truly market driven. Mortgage backed securities, sold by Fannie Mae and Freddie Mac, are sold in the secondary market similar to US Treasuries and other bonds.

The yield on the 10-year treasury bonds is a very good indicator of the direction of mortgage rates. There is a great opportunity for borrowers to buy or refinance their current mortgages.

When refinancing, always try to reduce the term of your loan to maximize the interest savings. A lower monthly payment does not mean maximum interest savings.

If you have FICO scores over 740 and a 25% equity position you will qualify for the best available mortgage rates.