Mortgage interest rates are at record lows and falling, but low rates don't exist in a vacuum. Rates aren't all you need to consider when choosing a mortgage to buy or refinance.

The record-low-mortgage-rate trend pushes the fixed rate mortgage (FRM) to the forefront as more affordable and relatively safer than ever -- once the loan is written, the low rate is locked in and monthly mortgage payments never change. However, a FRM is not always your best deal.

A refinancing rule of thumb once said you shouldn't refinance your mortgage unless the interest rate drops two percentage points below your current rate. Hit the buzzer on that one too. The two-percent interest rate spread rule isn't carved in stone.

The mortgage network LendingTree recently used its Weekly Mortgage Rate Pulse to dispel myths mortgage consumers frequently face. The Pulse tracks the lowest and average mortgage interest rates from lenders in the LendingTree network.

For the week ending Dec. 19 rates were down again in the week-over-week tally of LendingTree network lenders. The 30-year FRM came in at an average 4.22 percent (4.52 percent APR); 3.46 percent (3.92 percent APR) for 15-year fixed mortgages and 3.23 percent (3.51 percent APR) for 5/1 adjustable rate mortgages (ARM).

The 30- and 15-year FRM rates were down about a 12 basis points.

On the same day, the lowest mortgage rates offered by lenders on the LendingTree network also fell week-over-week to 3.50 percent (3.62 percent APR) for a 30-year FRM; 2.88 percent (3.11 percent APR) for a 15-year FRM and 2.50 percent (3.03 percent APR) for a 5/1 ARM.

LendingTree spokesman Jay Kolbe also said "We also wanted to highlight the top five mortgage myths that consumers run into frequently. The myths are as follows:"

• A 30-year FRM is always the best option. The 30 Year ARM is attractive because, right now, it provides long-term rate protection for low payments. However, a FRM is the most expensive option in terms of the interest-to-principal payment ratio. Other loan products offer borrowers greater savings. For example, a 5/1 ARM is more beneficial to a borrower for over 7 years when compared to a 30-year fixed given today's rates.

• At least 20 percent down is required for a home loan.

A 20 percent down payment will often come with the lowest rates, without mortgage insurance and give you the best shot at qualifying for a mortgage. However, savings-poor but income-rich home buyers can still opt for a Federal Housing Administration loan for as little as 3.5 percent down and private mortgage insurance.

• The rate must drop by 2 percentage points to make refinancing worthwhile. LendingTree says cutting the interest rate by even half a point can be a prudent decision. Also, do the math and check your budget. Even switching from a lower ARM rate to a slightly higher FRM can be a viable option that allows you to lock in your mortgage payment and not worry about interest rates inevitably rising, if not for a year or more down the road. The key is to sit down and run the numbers to find the break-even point to see if refinancing makes sense for your given situation. Don't forget closing costs, and the amount of time it'll take to recoup them after refinancing to a rate that saves you money each month. You'll have to remain in the home for sufficient time after refinancing if you want to recoup your closing costs and not cancel out potential savings.

• There's no point in shopping around for a mortgage when all lenders offer the same programs. There may be fewer loan programs available today then there were five to 10 years ago, but lenders continue to offer a host of different home loan programs. And rates can vary by more than a percentage point from one lender to another. Always comparison shop for home loans, but not just the interest rate. Look at closing costs and other fees that can amount to thousands of dollars.

• A pre-qualification is the same as a pre-approval. A mortgage loan pre-qualification is simply an estimate of how much house you likely can afford and, based on that, how much money a lender would be willing to loan you. Getting pre-approved means that a borrower has a tentative commitment from a specific lender for mortgage funding based on actual documentation and verification.

Published: December 29, 2011

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A journalist for 35-years, Broderick Perkins parlayed an old-school daily newspaper career into a digital news service offering editorial content and consulting services. Perkins' San Jose, CA-based DeadlineNews Group includes the flagship news site, DeadlineNews.Com, offering real estate, personal finance and consumer journalism, and a backshop, the Deadline Newsroom.