Good time to get a lower mortgage rate.

Economic data has been consistently showing signs of improvement, especially in relation to the housing sector. While this is good news, it often leads mortgage rates to move higher. With this in mind, borrowers are stepping up the pace to obtain low mortgage rates while they are still available.

Last week, the Labor Department reported that the economy added 236,000 in February which was well above economists' expectations. The unemployment rate unexpectedly fell from 7.9% to 7.7% and is now at the lowest rate since December of 2008. The Feds continued purchases of mortgage backed securities in order to keep mortgage rates low is dependent upon the unemployment rate. Recent Fed meeting minutes has shown mixed support for these purchases, although Fed Chairman Ben Bernanke recently stated that the current monetary policy will continue because the economy is still very fragile.

To get low interest rates requires that borrowers have a history of good credit, as well as, the qualifications that are needed to receive lender approval. As the spring home buying season approaches, potential home buyers should prepare in advance for the mortgage application process. A mortgage pre-approval for a home purchase is the best way to show realtors and home sellers that the intent of home shopping is in fact considered serious.

Also remaining the same this week, FHA 30 year fixed mortgage interest rates are as low as 3.250%, FHA 15 year fixed mortgage rates are as low as 3.000% and FHA 5/1 adjustable mortgage rates are as low as 2.250%. Time is running out to get in on the current FHA fees which will be going up for case numbers issued beginning on April 1st. With so many changes being made to FHA loans, at least the low down payment of 3.5% is still available for home buyers.

Home buyers can still use other options, such as housing grants or loans, to help with initial mortgage expenses. However, FHA closing costs (APR) are high because of the upfront mortgage insurance premium and other FHA fees that are charged to the home buyer. These fees can often be made cheaper by using allowable seller concessions that meet FHA guidelines..

Mortgage backed securities (MBS) have an affect on mortgage rates which move in the opposite direction. Over the week, stocks soared as investors moved to risky assets which hurt MBS prices. This often occurs when positive economic news is reported. Weekly Jobless Claims for the week ending March 1st dropped to 340,000 which was below the consensus of 350,000. The January Trade Deficit increased to $44.4B, which was higher than expected. Productivity for the fourth quarter was revised slightly to -1.9%.