Mortgage rates ride stocks to new record lows for 2010. Par rates on 30 year fixed rate mortgages have fallen to 4.5% to 4.75% for qualified borrowers. Although it is tempting to float your interest rate during these current market conditions, it would be wise to lock in at these attractive rates before banks further tighten their lending policies.

Many consumers are riding out the low interest only option ARMs they currently have. Some of these rates are as low as 3.875%. Why increase my monthly payment while I have 2 years remaining on my current 5/1 ARM loan? The answer is simple. Don’t get locked out on current fixed rates while gambling on the future. Any rally in the stock market over the next few weeks or months will push interest rates higher.

There are many other economic factors to consider before locking in on fixed mortgage rates. Indications are that a favorable report on unemployment figures is due. Any increase in employment will push interest rates higher. Lending activities by banks are becoming more restrictive and will leave only a few very highly qualified borrowers with an option to refinance their current loans. The majority of home owners will be locked out of the ability to reduce their monthly mortgage payments. Borrowers should be proactive in obtaining the best financing that meets their current and future financial needs, while the market place is still open to them.