Housing Bust Is Over!

NEW YORK (CNNMoney) -- Mortgage rates fell again this week, smashing previous record lows, according to a regular weekly release from mortgage giant Freddie Mac.

The rate for a 30-year, fixed-rate loan, the most popular mortgage product, dropped to 3.62% from 3.66% last week. The rate has matched or hit a new low for 10 of the past 11 weeks, Freddie Mac said. Meanwhile, the 15-year fixed rate fell to 2.89%, down from 2.94%.

"Recent economic data releases of less consumer spending and a contraction in the manufacturing industry drove long-term Treasury bond yields lower over the week, and allowed fixed mortgage rates to hit new all-time record lows," said Frank Nothaft, Freddie Mac's chief economist.

The 15-year fixed-rate mortgage is popular among homeowners who are seeking to refinance or to trade-up and minimize their total interest payments. At the current rate, a borrower financing $200,000 would pay $1,370 a month and spend a total of just under $47,000 in interest over the 15-year span of the mortgage.

Related: Where home prices are rising fastest

Buyers who want to minimize their monthly payments by opting for a 30-year loan would have payments of just $911 a month on a $200,000 loan. But they would pay $128,000 in interest over the life of the loan.

Extra-Low Mortgage Rates

3 Reasons Not to Refinance at Extra-Low Rates

Be on guard against those low, low mortgage rates - you may end up spending more by refinancing than if you had stuck with your current mortgage, even if your new interest rate would be under 3 or 4 percent financial planners warn.
Here are 3 warning signs for not refinancing your home at a lower rate:
-You're one of the many homeowners who owe more than what the home is worth. Lenders may ask you to pay a higher rate of interest, perhaps a quarter or half percent more than the average national home loan interest rate, mortgage brokers say. Even worse, a prospective lender may ask you to pay property mortgage insurance, which will add thousands of dollars to the cost of your loan, says Deerfield Beach, Fla., financial planner Blair Shein.
-There's a chance you might move to take a new job. If you don't stay in your home for at least two years then you may actually lose money on refinancing, says Plantation, Fla., financial planner Matt Saneholtz, who is president of the Financial Planning Association of Greater Fort Lauderdale. That's because you won't have time to recoup the closing costs, he said.
-You will end up paying more. If you have less than five years to pay, then you will generally pay more if you take out a longer loan, even if it offers a much lower interest rate, Shein said. That's because the longer loan length means more interest costs although your monthly payment will be smaller, he says. You only come out ahead if you continue making your existing loan's bigger payments on the new loan. That will ensure you will pay less interest - and pay off the loan even quicker, he said. "But the reality is that most people don't that," Shein says.
Homeowners should examine all the costs before signing up for a new loan. "Do the math," financial planner Saneholtz says. And beware of the hidden closing costs: You may not have to pay any when you sign for the mortgage, but those costs will be added to your new loan - often involving thousands of dollars, he says.

©2012 Sun Sentinel (Fort Lauderdale, Fla.) Distributed by MCT Information Services and RISMedia