Low mortgage rates are enticing more homeowners to apply for a mortgage refinance. Mortgage loan application volume rose 13% for the week ended Aug. 13, 2010, compared with a week earlier, according to the Mortgage Bankers Association (MBA). The MBA’s Refinance Index jumped 17% from the previous week.

Many homeowners are jumping at the chance to refinance as the 3o-year fixed-rate mortgage has fallen to an average of 4.6% and 15-year home loans are at 3.99%. With rates so low, here are a few things to consider if you are trying to decide whether or not to refinance.

• How long will it take to recoup any closing costs associated with refinancing? The longer you plan to stay in your home after refinancing, the better off you’ll. Have your mortgage broker run the numbers to find the break even point for refinancing.
• Do you have an adjustable-rate mortgage (ARM)? There are plenty of people out there who still have ARMs that are scheduled to reset at a higher rate at some point. Mortgage rates are low now, but think about whether or not you’ll be able to afford the monthly payments when rates start to climb again.
• Do you have enough home equity to refinance? It doesn’t matter how low mortgage rates are if you are underwater on a home loan. Unless you qualify for the government’s program to help distressed homeowners — which has had lukewarm results — it will be tough to get a mortgage lender to approve a refinance.

Even if you don’t qualify for a home refinance right now continue to make your monthly housing payments on time each month to avoid problems. Not only will you avoid foreclosure, but a as the housing market recovers you may find yourself in a better position to get approved for refinancing down the line.

The mortgage industry shed 2,500 jobs in June, as home sales continued to slow. The mortgage banker/broker sector had 246,500 full-time positions in June, according to  the Bureau of Labor Statistics.

Even though mortgage rates are at record lows, many potential home buyers are waiting on the sidelines, either unwilling or unable to get mortgage loans, which decreases the need for workers in the mortgage industry.

Much of the activity in the mortgage sector involves refinancing, as homeowners look to get out of high-interest or adjustable-rate mortgages. For some homeowners dropping their mortgage rate just 1% has the potential to shave hundreds of dollars off monthly mortgage payments.

The average mortgage rate for a 30-year fixed loan is 4.49%, and 15-year rates are 3.95, according to Freddie Mac.  Both mortgage rates are at all-time lows. But concerns about the slow pace of economic recovery has many potential home buyers steering clear of taking on a new home loan when the unemployment rate remains so high. Until the economy shows stronger signs of recovery, many people will continue to postpone their dreams of buying a home whether or not they can qualify for a mortgage loan.

Almost twice as many people dropped out of the government’s mortgage loan modification program in June as those who received permanent modifications, according to the Treasury Department.

There were 91,000 dropouts  in June, which means that 530,000 homeowners have left the mortgage program without a permanent loan modification, reported Reuters. Only 49,000 borrowers received permanent mortgage modifications, for a total of 389,000.

The Home Affordable Modification Program (HAMP) has been criticized for not helping enough homeowners who are at risk of foreclosure. The Department of Housing and Urban Development (HUD) and the Treasury Department released the Obama administration’s July housing scorecard this week and acknowledged the challenges with helping homeowners. 

HUD Assistant Secretary Raphael Bostic said in a statement: “The housing market is performing better than the predictions made over a year ago. We’re absolutely not claiming victory, but due to the Obama Administration’s efforts, improved home affordability is continuing to provide opportunities for prospective, qualified, home buyers, while promising neighborhood stabilization efforts are helping hard hit neighborhoods start to recover.”

The housing market is still struggling to recover and the numbers could mean that more foreclosures are on the horizon. If you find yourself struggling to hold on to your home, talk with a housing counselor as soon as possible to discuss your situation. Like many Americans you may not qualify for a permanent mortgage loan modification, but there may be other options that can help your situation.