Many in the real estate business are hoping that the bump in home values might scare some reticent eligible homebuyers from the sidelines. Though home values and current mortgage rates have remained low for months, few have taken advantage. According to the Mortgage Bankers Association, homebuyer mortgage applications have declined almost every week of August.

While much of the decline can be attributed to strict lending standards; a significant amount of eligible buyers have been dragging their feet in hopes of catching the bottom of the market to snare low-priced inventory.

To claim the best possible deal on property, consumers require an even mix of low home prices and affordable interest rates. When one ascends, prospective buyers often lose out in the long run. If home values continue to rise, many buyers may miss out on coveted deals; as a historically ideal buyer’s market slips away unexpectedly.

Still, although experts agree that current conditions make buying ideal, none are able to precisely gauge which direction interest rates and home prices will go in the immediate future. To get the best possible deal, interested eligible buyers should act quickly in case evolving market conditions make affordable housing harder to attain.

Though most analysts agree that current conditions have created one of the best buyers’ markets the country has ever seen, few have been able to take advantage due to risk-averse lenders who aren’t handing out mortgage loans as freely as they did before the housing crisis.

During a recent three-day Midwest tour in western Illinois, President Obama said his administration was contemplating ways to encourage banks to loosen their lending restrictions; however, he admitted that it would likely be at least another two years before the housing market will see any significant improvement. Many experts agree with Obama’s assessment, and most predict that home prices will remain low for at least another year.

The glut of low-priced inventory is good news for eligible buyers across the nation, and though home values are expected to remain low for the foreseeable future, interest rates may not. If you’re in a strong position to buy, you may want to act now before rates ascend and effectively increase the overall cost of your mortgage.

While some improvements help to increase the value of a house, others do not. Before you consider a home equity loan, find out which home improvements can help increase your home’s value and provide you with even more equity in the long-run.

Top ten property improvements that pay you back

According to CNN Money, a service of CNN, Fortune and Money magazines, the following ten home improvements can add real value to your house.

1) Front entry doors – Not only do these add beauty to your home, they lower energy consumption.

2) Attic bedroom – Converting your attic into an extra bedroom can add big value to your home.

3) Decks – Adding a new deck is a relatively cheap way to extend your home’s living space.

4) Siding – New siding adds beauty and durability to your home’s exterior.

5) Kitchen – Even minor improvements can help add value to what many consider the heart of the home.

6) Windows – New energy-efficient windows also help to lower utility costs.

7) Bathroom – Minor additions and improvements in the bathroom, such as new hardware and countertops, can add value to your home.

8 ) Backup power generator – A small, compact generator can provide power to your home within seconds of a utility outage.

9) Basement – Turn your basement into a spare room, office or apartment to increase your home’s worth.

10) Additions – These can significantly increase the value of your home; however, if they can also price your home above the local market.

Rock-bottom home prices and plummeting fixed mortgage rates have combined with tax incentives to tip the scale in favor of homeownership, though many continue to rent for one reason or another.

Should you rent or buy?

If you?re not sure whether you should rent or buy, you should consider the following before contacting a local mortgage lender:

Length of residence ? If you don?t plan to stay in the property for at least seven years, you should probably rent rather than buy. Transactional costs can make home buying expensive, and you need years to make the expenses pay off. Additionally, with buyer activity scarce in today?s real estate market, you may have trouble finding interested parties if you do decide to sell.

Job security ? If you think you may be forced to switch jobs anytime soon, homeownership is not a good choice. Employment irregularities can prevent you from getting approved for a loan and compromise your ability to afford your monthly mortgage payments. Additionally, if you?re locked in a mortgage, you won?t be able to relocate if a prime position opens up at a location several miles away.

Although the historically low rates provide a perfect chance for buyers to secure affordable loans, many aren?t able to act due to tight lending standards. Additionally, some eligible buyers are stubbornly holding out in case home prices descend even further than they already have.

While this strategy could pay off; according to some experts, it may also end up costing prospective buyers in the long run.

Freddie Mac?s chief economist, Frank Nothaft, says he does not expect rates to stay low for much longer and warns that his company projects rates to get closer to the 5 percent mark toward the end of 2011.

On the other hand, Steven Leslie, top analyst for the Economist Intelligence Unit, a part of the Economist Group, says a dim outlook for the global economy leads him to believe that mortgage rates will remain low for the foreseeable future.

The differing views highlight just how challenging it is for experts to gauge which direction rates will go. Though analysts can provide best-guess scenarios, the only thing they can say for sure is that now is a great time to buy.

Unfortunately, bills keep coming and interest continues to accrue despite undeserved hardships.? With so many homeowners unable to pay their bills, many are desperate for debt management solutions that will ease the burden of unmanageable monthly payments and give them a chance at getting back on track.

If you’re a homeowner stuck in a tight spot with little idea of how you will continue to make ends meet and support your family, you should consider mortgage refinancing as a way to reduce your stress and anxiety by lowering your monthly expenses.

Home Mortgage Refinancing

This borrowing strategy involves changing the terms and conditions of your existing mortgage. Typically, homeowners are able to generate extra cash by lengthening the term of the loan, increasing its size, and/or lowering the interest rate.

Mortgage refinancing usually makes the most sense when available interest rates dip below the borrower’s current mortgage rate. By securing a lower interest rate, the homeowner is usually able to lower his or her monthly payments and may be able to take out extra cash by leveraging established home equity.

Is now a good time to refinance?

Now is a great time for borrowers to refinance mortgage loans. According to the most recent reports from the federally-backed mortgage company, Freddie Mac, average interest rates across the country are at or near their lowest points in the last half-century. Tough lending standards have prevented buyers from taking advantage; however, the affordable rates have led to a refinancing boom. In recent weeks, more than 70 percent of mortgage applications were of the refi variety. If you’ve got enough equity in your home and your financial standing and credit rating are up to par, you should strongly consider loan refinancing instead of other debt management solutions.

Benefits of using a consultant

Though current interest rates are at their lowest point in nearly a half-a-century, they may still fluctuate from lender-to-lender. A mortgage consultant is able to search relatively vast segments of the lending industry with an eye out for the best possible terms. Instead of you negotiating with one or a few lenders, your agent does all of the legwork in a more efficient and effective manner.

Thing to consider

In return for securing the best possible loan for you, mortgage brokers are paid a fee dependent on the type of deal they get. Usually, the better deal they score for the borrower, the higher their fee. Though brokers typically work hard to find the best available deal, you shouldn?t be too forthcoming by telling the consultant what type of interest rate you’re willing to accept. Instead, let your broker tell you what he or she can find, and then shop around on your own to be sure that the broker’s terms are reasonable.

What are the drawbacks?

Though using a mortgage broker can help you secure a better loan, it can also create a few problems. To find the best possible deal, a broker may connect you with a lender outside your state. In this situation, you won?t be able to go to a local office and meet one-on-one with representatives to iron out problems. Additionally, non-local lenders may not understand the kinds of heating systems used in certain areas of the country or be familiar with certain types of private septic systems; they might also be unfamiliar with common terms and classifications used by local appraisers. If minor problems like these are a concern, you can ask your consultant to seek offers only from lenders within a reasonable proximity of your specific area.

Why are second mortgage rates higher?

When lenders provide loans, they are making an investment. Interest charges represent the monetary return on the investment, and lenders expect a higher return when they assume greater risk. In short, when lenders view loans as more risky, they assign a greater interest rate; when they view loans as less risky, they assign a lower rate.

When assessing risk, lenders consider things specific to each borrower, such as his or her credit rating, debt-to-income ratio and job security; however, they also consider risk associated with the loan, itself. Since second mortgages are subordinate to first mortgages, they are considered more risky, because–if a borrower defaults–the initial mortgage is paid first.

If interest rates are higher, how can homeowners save money?

Although home equity loan rates are higher than those associated with first mortgages, they tend to be much lower than rates that come along with credit cards and other revolving credit accounts. If you need to consolidate several debts into one payment, a second mortgage can provide you with lower monthly payments and a more affordable interest rate.

Additionally, in most cases, home equity loan interest is tax-deductible; so, in the end, even though the rates are higher, the homeowner ultimately nets substantial savings as long as he or she is using the loan for the right reasons.

Should I compare rates?

Although lenders typically use the same criteria when assessing risk, you can find varying rates by shopping around. In-house policies and profit-making strategies can lead to a relatively wide difference between offers; so do the legwork and compare rates if you want to score the best deal.

These days, to qualify for a mortgage loan, borrowers typically need high credit scores, a rock-solid financial standing, and enough cash to afford a 20 percent down payment. With lenders employing risk-averse policies, many potential homebuyers have had great difficulty finding a loan partner. Though mortgage rates sit at their lowest point in years, buyer activity is relatively scarce due mostly to tight lending restrictions that bar potentially credit-worthy individuals from participating.

Can I still get a subprime mortgage?

Although almost no private lenders are offering subprime loans these days, the Federal Housing Authority has continued to offer lenient lending despite the mortgage meltdown. If you are interested in becoming a homeowner but lack the financial profile expected by private lenders, an FHA loan may be your best or only real option.

To qualify, borrowers need only to meet relatively low credit standards and put up about a 3 to 5 percent down payment.? Though this type of lending may seem risky at first glance; because the loans are insured by the federal government, lenders feel more comfortable backing each mortgage.

Although FHA loans are far more lenient than the typical private mortgage loan, they do come with certain requirements. To qualify, you must have maintained consistent work with the same employer for at least two years. You must also have reasonably good credit with no more than a pair of 30-day delinquent payments within the past two years. Most importantly, the mortgage amount you are seeking cannot exceed 30 percent of your gross monthly income.

Different Types of Mortgages Assist Troubled Homeowners

Among the different types of mortgages that homeowners are seeking to refinance under are fixed interest rates.? Many default mortgages consist of a variable interest rate that instantaneously rose after a set period of time.? When these interest rates spike, the monthly payment increases drastically.

To help neutralize the difficulties associated with paying a much higher monthly payment, homeowners are seeking out low interest, fixed rate mortgages.? With the interest rate at an all-time national low, many of the ailing homeowners who do refinance are finding much needed relief in under a low fixed-rate, saving hundreds in monthly payments every month.