If you follow the mortgage rates like I do, you know they have dropped sharply over the past couple weeks. A 30-year fixed-rate conventional mortgage, which only requires a 5% downpayment, is in the low 4%'s - the lowest for 2011. FHA 30-year fixed is even lower. It dipped into the high 3%'s and FHA only requires 3.5% down payment.

On a 15 year note, Conventional rates are in the upper 3%'s and FHA 15 year fixed in the LOW 3%'s!!! That's crazy.

In addition, the recent popularity of the FHA 203k loan has allowed countless buyers to purchase homes they would not have otherwise considered because they can now afford to renovate. FHA 203k loans allow purchasers to roll updating, upgrading, and remodeling costs into the loan. Additionally, all the work must be complete before move-in. So, no more half-done remodeling projects that cost way more than expected and maxed out credit cards.

What If You Own -- Should You Refinance With These Low Rates?

Maybe. Maybe not. Just because interest rates have dropped doesn't mean refinancing always makes the most financial sense. Before submitting a mortgage application or having your credit pulled, find out how much you will save by refinancing and what costs you'll incur.

If you are interested in refinancing, I suggest you look into this quickly because rates will most likely go up sooner rather than later.

Step 1: Contact your trusted mortgage banker and send them your most recent mortgage statement. Ask them for an analysis of potential monthly savings and costs (this should not require a credit pull, mortgage application submission or any upfront fees).

Your lender should be happy to freely discuss any potential savings and expected cost to refinance along with the pros and cons of refinancing. If the monthly savings are substantial and it fits into your goals, then you can move forward with a mortgage application and credit pull (but not before).

Step 2: Lastly, feel free to run things by me before you proceed. I'm here to help. Also, if you don't have a trusted mortgage banker, let me know. I have great relationships with a few lenders that I genuinely trust. I have burned through many mortgage folks over the years that just couldn't make good on the promises they made. Not these guys. They are total rockstars and you will be in good hands. I'd be happy to make that connection.