Mortgage rates during the past month rose gently, though not enough to make financing unattractive. Loans at or around 7 percent were widely available, rates some 2 percent below interest levels a year ago.

The gap between fixed-rate interest levels and start rates for adjustable-rate mortgages (ARMs) continued to grow. Once the difference is around 1.5 percent expect consumer demand for ARM financing to increase. ARMs generally have easier qualifying standards than fixed-rate loans -- and also more risk because rates can rise in the future.

PMI Cancellation Clauses

It's become increasingly easy to cancel private mortgage insurance (PMI) and even FHA mortgage insurance premiums (MIP). New federal rules now prevent lenders from requiring insurance long after such coverage is necessary. However, the new federal standards apply only to conventional loans made after July 29, 1999, so millions of older mortgages -- most loans -- are not covered.

The good news is that many lenders now permit borrowers to cancel PMI when they have 20 to 22 percent equity and a good payment history. You could save hundreds of dollars a year by canceling unneeded PMI premiums. For details, contact your lender and ask about their cancellation policies. Most will want a current property valuation, usually by an appraiser of their choice, plus a good payment record over a period of several years.

Rising Energy Costs Impact Your Home

Energy costs around the country have risen significantly during the past year, and may rise further this summer. However, it's possible to reduce energy costs with a few quick and easy strategies.

First, have heating and air conditioning systems checked annually by professionals. Change filters every two months.

Second, turn down the heat and turn up air conditioning settings. A change of just a few degrees can mean a touch less heat and a little bit less cooling -- and also significant utility savings.

Third, watch for leaks. Even small drips and leaky toilets can produce big water losses over time.

New FHA Refinancing Rules

If you now have an FHA loan and wish to refinance, new rules make it easier and cheaper. Under new streamline refinancing standards you can now get a replacement FHA loan, perhaps financing with a much lower rate, and pay less at the closing table. The way it works is that the FHA is allowing borrowers to finance closing costs with home equity built up over time through loan amortization -- the process of paying down loans month-after-month. In effect, you may be able to borrow more than you currently owe on your FHA loan, provided the extra dollars are used to pay closing costs.