Mortgage rates rise for week of December 6, 2010

Once again, mortgage rates are rising. HSH Associates reports that combined average rates for a 30-year fixed-rate mortgage (FRM) reached 4.95 percent, up 9 basis points. Rates for a 15 year FRM increased from last week's 4.26 to 4.33 percent. Rates for a 5/1 adjustable rate mortgage (ARM) loan jumped 7 basis points from last week's 3.66 to 3.73 percent.

Slumping government bond prices blamed for rising mortgage rates

Bloomberg News reports that slumping prices on government backed bonds are causing rising home mortgage rates, which have risen consecutively during the past four weeks. This trend doesn't bode well for fragile housing markets, which are depending on the affordability of home loans fueled by recent record low mortgage rates.

Although rising mortgage rates impact monthly mortgage payments and the cost of financing a home, low home prices in many areas are assisting moderate income and first time buyers with opportunities for finding affordable homes and mortgage loans.

Buying or refinancing a home: Mortgage rates are only one consideration

When shopping for home loans, it's important to shop and compare mortgage rates, but comparing the annual percentage rate (APR) stated on mortgage quotes offers a more accurate estimate of what a mortgage loan will cost. Lender fees, points, and closing costs all contribute to the cost of financing a home. When evaluating two mortgage quotes for fixed rate mortgages of the same loan amount, interest rate, and repayment term, any difference in APR is caused by the difference in estimated fees and costs.

Short on cash? Mortgage lenders and real estate professionals can assist with finding state and local home buyer assistance programs that may help with raising cash for your down payment and closing costs.

Our live database of current mortgage rates can help you find the best mortgage rates in your area.