Don’t expect this for to much longer as the artificially influenced mortgage rates are only going to rise after the FEDS announced the phasing out of purchasing MBS or mortgage backed securities.

From the StarTrib:

Rates on 30-year home loans dropped below 5 percent for the first time in four months, but still remained above this year’s record low, Freddie Mac said Thursday.

The average rate on a 30-year fixed mortgage was 4.94 percent, down from 5.04 percent last week, Freddie Mac said. The last time the 30-year home loan averaged less than 5 percent was the week ending May 28, when it was 4.91 percent.

Rates hit a record low of 4.78 percent in the spring and remain appealing for people interested in buying a home or refinancing.

On Thursday, the National Association of Realtors said the number of signed sales contracts rose for the seventh straight month in August, as homebuyers rushed to take advantage of a tax credit for first-time buyers that expires in November.

But borrowers may want to consider the Federal Reserve’s announcement last week that it is slowing down a program intended to lower mortgage rates and boost the housing market. Analysts say homeowners who want to refinance mortgages shouldn’t delay.

Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country. Rates often fluctuate significantly, even within a given day.

The average rate on a 15-year fixed mortgage fell to 4.36 percent from 4.46 percent last week, according to Freddie Mac. This week’s rate on 15-year mortgages was the lowest since Freddie Mac started tracking it in 1991.

The rates do not include add-on fees known as points. The nationwide fee for loans in Freddie Mac’s survey averaged 0.7 point for 30-year mortgages, and 0.6 point for 15-year and five-year loans. The fee averaged 0.5 point for one-year mortgages.

Importance of FHA financing

By choosing FHA, it allows a home buyer to put down a minimum of 3.5% for the down payment. These loans work well for first time home buyers given that not so giant payment needed, you can save your money for other things.

Just because the building is not FHA approved, doesn’t necessarily mean you can’t use a FHA loan. Lenders can do a ‘spot approval’ on the building if they want but it has to meet certain guidelines and could delay the process.

Almost all new condo buildings being developed these days apply for FHA approval because developers realize the importance of a building appealing to FHA buyers.

As of the date this post was published, there are  140 condo developments in Minneapolis that are FHA financing approved.

Click here for an approved list of condos, just type in the information that you are looking for.