We know mortgage rates aren't as cheap as they were this spring.

But we're a little baffled as to why the number of new applications plunged to a seven-month low last week.

The average cost of a 30-year, fixed-rate loan -- the most popular way to finance a home -- was 5.70% in our most recent weekly survey of major lenders taken July 1.

That's about a half-point higher than it was in April, when the average fell to 5.13% -- the lowest it's been since Interest.com and its print predecessor began the survey in 1985.

But by any historical standard, mortgage rates are still very affordable.

Rates averaged about 6.5% the past few summers. Anytime you can get a mortgage for less than that, you've gotten a good deal.

In our extensive database of mortgage rates, you'll find lenders in most markets charging 5.25% to 5.75% for 30-year, fixed-rate loans with no points and fees of $1,000 or less.

Loans like that shouldn't cause anyone to postpone a purchase or refinancing.

The Federal Reserve is still flooding the mortgage market with money by purchasing billions of dollars' worth of home loans made by commercial banks and mortgage companies.

That's what drove rates down this winter and spring.

But the Treasury Department is starting to borrow the staggering amounts of money needed to finance the record federal budget deficit, which is projected to reach $1.84 trillion this fiscal year -- four times more than last year's record $454.8 billion deficit.

That's why long-term debt, including mortgages, has gone up a bit despite the Fed's effort to keep rates super low.

The 4%, 30-year mortgages that had everyone talking this spring are probably not coming back.

But you can still come close to those super-cheap rates by paying a point or two.

Paying points allows borrowers to obtain a lower interest rate than the lender normally offers, with one point equaling 1% of the loan amount. It's worth considering if you're going to live in the house long enough to recoup the extra up-front costs.

Two points will allow you to buy the rate down to about 5.0% in most markets and as low as 4.625% in a few cities.

We have a calculator that compares loans with and without points, so you can pick the one that's right for you.

Another way to still get a 4% mortgage is to take out a shorter loan.

That won't get you the lowest possible monthly payment, but there are still a few lenders offering 15-year mortgages for 4.25% with 2 points.

We also have a calculator that will let you compare all the costs and savings of 15-year versus 30-year mortgages.

You've also probably heard that banks and mortgage companies have tightened their requirements for getting a mortgage after unwisely lowering their standards during the housing boom.

They have. But that return to reasonable underwriting standards doesn't mean you can't get a mortgage.

You'll have the best chance of getting a low rate with low fees if you:

Have a reasonable credit score. Anything above 700 should work, although fees are rising even for people who have scores as high as 739. Here's where to find out what goes into your credit score and how to get your credit score.

Poor credit is another good reason to pursue an FHA or VA loan. They'll accept borrowers with lower credit scores and more debt.

Earn enough money to repay the loan. Here's where to learn about the two affordability tests most lenders use.

Be able to fully document your income, assets and debts. Here's where to find out about questions you'll be asked on a mortgage application and all the paperwork you'll need.

By Mike Sante

Interest.com Managing Editor