Area bankers and mortgage companies are telling people to check into refinancing, after mortgage rates fell last week to the lowest level on record.

“It’s a great time to buy a house,” said Alden Buerge, chairman and CEO of First State Bank in Joplin.

Mortgage company Freddie Mac said last week that the average rate for 30-year fixed loans fell to 4.69 percent, from 4.75 percent the week before. That’s the lowest since Freddie Mac began tracking rates in 1971. The previous record of 4.71 percent was set in December. Rates on 15-year, fixed-rate mortgages fell to an average of 4.13 percent, the lowest in records dating to September 1991 and down from 4.2 percent a week earlier.

Buerge on Thursday said his bank was offering 4.625 percent for a 30-year fixed-rate mortgage, and 4.125 percent for a 15-year fixed loan.

“It’s an incredible rate,” he said, adding that he has been in banking 37 years and has never seen rates this low.

“It has been, I think, back in the ’50s — after World War II ended, nothing in my recollection,” said Doyle Still, officer manager with First Home Mortgage in Joplin, when asked about the low rates.

First Home Mortgage’s rates were running at 4.5 percent on 30-year fixed mortgages and at 4.125 percent for 15-year fixed, he said. Paying down a point — 1 percent of the loan — can push rates below 4 percent, he said.

“For example, a person could get a 3.875 percent by paying a 1 percent origination fee,” said Still, who recalled the early 1980s when rates were 18 percent.

Mortgage rates have been falling for months. Investors wary of the European debt crisis and the turbulent stock market have shifted money into the safety of Treasury bonds, driving down yields. Mortgage rates tend to track yields on long-term Treasury debt.

According to Freddie Mac last week, rates on five-year, adjustable-rate mortgages averaged 3.84 percent, down from 3.89 percent a week earlier. That also was the lowest on Freddie Mac’s records, which date to January 2005.

Buerge, Still and other lenders say there is one caution flag, however. Because of the housing crisis, banks and regulators are cracking down on loans. While those low rates are available, fewer people qualify because of tighter lending rules.

Any number of issues can affect rates, they said, including the loan-to-value ratio, a person’s credit score and credit makeup, and a person’s debt-to-income ratio.

Still said a person will need a credit score of 780 to qualify for the lowest rates available right now.

A report issued by the Federal Reserve Bank of Kansas City in 2008 noted that the average credit score in Joplin was 605, compared with a national average of 617.

Still, lenders are telling people to take a look.

“If you have good scores, a good history, this is still a great time to refinance,” said Still. “If someone has a rate now that is 1.5 percent higher than the market is today, they really need to look at refinancing. If it is a $200,000 loan, 1 percent is worth the time to refinance.”

When you purchase your new car, car dealers often try to talk you into getting a car finance loan with their in-house financing department. It is often easier and less restrictive to get a loan with dealers than with banks, but the down side is that these car finance loans often come at higher interest rates.

If you decide to use your dealer’s car finance loan, do make sure to negotiate for a lower interest rate. There should be some negotiation room as dealerships usually have several loan sources, each with its own interest rate level, such as the manufacturer’s credit company or the local bank. You should also investigate other sources, such as your bank or credit union.

You should seriously consider a car loan refinancing if you initially did not get 0% to 3% APR from the dealer or the bank. By refinancing your car loan, your current loan is paid off with the new loan coming from a different lender at a lower interest rate. You can now save more money with the lower monthly car loan payments thanks to the lower interest rates. You will also be able to accelerate your car loan payoff in a shorter period of time.

It makes more sense to refinance your loan earlier as the interest is usually paid in the earlier payments. The earlier you apply, the more money you can save. However, if you refinance after the fourth year your savings will not be as much and thus not worthwhile.

When shopping for different refinance car loan packages, make sure to evaluate them not just on the interest rates offered. Compare also other fees related to the loan, prepayment penalties, and the terms for the conversion options. You should also find out the lock-in period for the different loan packages. The lock-in period is the period in which the interest rate quoted to you is guaranteed, and ranges from 30, 45 to 60 days. The longer the lock-in period, the higher the price of the refinance loan.

With your savings from refinancing, you need to put it to good use. If you continue to make the same payment amount, you will be able to reduce the principle owed much quicker. If you lower the monthly payment to the new required amount, you won’t be paying it off sooner, but at least you will be paying less.

To Refinance Car Loans visit Susan’s site at Auto Loans and Car Loans. Susan also enjoys writing on a wide range of topics at Health and Fitness.

A mortgage refinance boom is in full swing, as homeowners take advantage of record low rates by refinancing their home loans.

But a home loan refi is more complicated than it was a few years ago. Home values are lower and paperwork requirements are higher. It’s easy to make mistakes while refinancing a mortgage.

To help you avoid some of the most common errors, here is a list of five things you shouldn’t do when you refi.

Deluding yourself about the value of your home is an excellent way to ruin a refi. Too many homeowners ignore falling home values in their neighborhood, convincing themselves their houses are worth at least what they paid for them.

In mortgage refinances today, the most common reason for denial is a home appraisal that comes in too low. The lender won’t lend for more than the appraised value. And a lot of homeowners go into denial about the decreased values of their homes.

“Don’t overestimate what the value of your home is. Don’t kid yourself and think your house is worth $500,000 when it’s really only worth $400,000,” says Dale Robyn Siegel, author of the book “The New Rules for Mortgages” and owner of Circle Mortgage Group in Harrison, N.Y.

Homeowners who delay locking a good mortgage rate risk making a refi uneconomical.

While floating, you take the risk that mortgage rates will go up. Rates could rise enough so that it’s no longer worth the time and expense of refinancing, says Bob Walters, chief economist for Quicken Loans.

Also, rate locks have expiration dates. So, it’s a good idea to build a cushion of a few days in case there’s a delay in the loan closing, says Dan Green, mortgage planner for Waterstone Mortgage in Cincinnati.

If you have a 30-day rate lock, it’s better to set the closing date on the 28th day than the 30th day — just in case there’s a snag that delays the closing by a day or two.

Taking a sledgehammer to the interior of your home before the appraiser arrives is a good way to get turned down for a refi.

The appraiser delivers an estimate of the home’s value on the day of the inspection. The house will be worth less on that day if the upstairs is a shambles or the bathroom fixtures have been ripped out. That’s the case even if the renovations, when completed, will enhance the home’s value.

“Don’t start a renovation before the appraiser gets there,” Walters says. “You’ll see this sometimes when people are taking cash out and want to do a bunch of stuff. Do not do that, because if you’ve ripped out half the second floor and it’s not in final condition, we can’t close your loan.”

If you plan to renovate, start after closing the refi.

Want to throw your home loan into limbo?

“Go on vacation and don’t tell the lender,” Walters says.

Lack of communication will throw a pending mortgage into turmoil. “Remain accessible,” Walters says. “Don’t disappear. Sometimes people do.”

A lengthy disappearance might have been a nonissue a few years ago, but it’s not a good idea now. Lenders’ paperwork requirements are more stringent than they were three years ago.

Expect the lender to ask for documents sometime between application and closing. It might be a request for your latest pay stub or an explanation of a big deposit into your checking account.

Stay in contact with the lender, and respond sooner rather than later to requests for more documentation.

If you want to do long-term damage to your personal finances, start all over again by refinancing for a full, 30-year term. That way, you spend thousands of dollars on interest that you otherwise could have saved.

“The first question I say is, ‘How long have you had that mortgage?’” Siegel says. “If they’ve had it for at least four to six years, I say, ‘Look, I know you want to refinance, but at least let’s do a 25-year, so you’re not back at square one.’”

Then, she explains the monthly payment on a 20-year term, because after hearing the details “(they) might want that.’”

Reducing the term by just five years can yield big savings. On a $200,000 mortgage at 5 percent, you save $35,758 in interest by paying off the loan in 25 years instead of 30.

Pay off that home loan in 20 years instead of 30, and you save $69,733 in interest.

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