UPDATE 1-U.S. mortgage rates sink to or near all-time lows

* Mortgage rates near record lows, expected to boost sales

* Home sales set to rise on low rates, prices, tax credit

* Rates won't get much lower-Bob Moulton, mortgage firm

* May be strong winter for home borrowing/sales-Moulton

(Adds quotes, housing poll, byline)

By Lynn Adler

NEW YORK, Nov 19 (Reuters) - U.S. fixed mortgage rates sank to or near record lows last week, home funding company Freddie Mac FRE.N said on Thursday, adding incentive for refinancing and home purchases.

The average 30-year home loan rate fell 0.08 of a percentage point to 4.83 percent, on the brink of the all-time low of 4.78 percent set in April, based on Freddie Mac records dating back to 1971.

Fifteen-year mortgage rates dropped by 0.04 percentage point in the week ended Nov. 19 to 4.32 percent, the lowest since Freddie Mac began tracking them weekly in 1991.

A year ago, the 30-year mortgage rate averaged 6.04 percent and the 15-year rate stood at 5.73 percent.

Despite the rock-bottom borrowing costs, applications to buy homes sank last week to a 12-year low, the Mortgage Bankers Association said on Wednesday.

Potential buyers were holding back from committing in hopes that the government would extend the expiring $8,000 first-time buyer tax credit.

Earlier this month the tax credit was indeed extended for several months -- with loan closings now required by June 30 instead of the end of this month -- and broadened to include a $6,500 credit for existing owners buying a new house.

Mortgage applications are widely expected to pick up in coming weeks as home shoppers look to beat the new tax credit deadline and take advantage of low loan rates.

"You've had a lot of borrowers on the fence with refinancing and now that rates have dropped we've been extremely busy in the last couple of weeks," said Bob Moulton, president of Americana Mortgage Group in Manhasset, New York. "I don't think we're going to get much lower (mortgage rates)."

The company's business has picked up 30 percent year-to-date compared with the same time last year.

"Rates are low enough to get things jump-started," said Moulton. "Winter time historically is quiet" as home shopping slows until warmer months return, "but with prices down and rates at a record low we might see more activity this winter."

The steep mortgage rates slide over the past year is pay-off for massive government investments aimed at cutting borrowing costs to stimulate U.S. housing and the economy.

Home prices on average have just 0.5 percent more to decline before bottoming and rising by about 3 percent in 2010, according to a Reuters Poll on Thursday.

Prices will have plunged 33 percent from their 2006 peak to the trough. Government interventions are gaining traction, however, and should help buffer against housing market troubles spurred by the highest unemployment in more than 26 years. To see Poll story, click on [ID:nLAG005928].

In addition to the tax credit, the Federal Reserve by March 31 will have bought more than $1.7 trillion in mortgage-related and Treasury securities to reduce interest rates and help revive housing.

"Low fixed rates throughout the third quarter prompted an estimated $1.1 trillion in refinancing activity, saving homeowners about $10 billion in aggregate monthly payments over the first 12 months of their new loan," Freddie Mac chief economist Frank Nothaft said in a statement.

It was the third straight weekly drop in the 30-year mortgage rate, sending it to the lowest level since the week ended May 21.

Lenders charged an average 0.7 point in fees on the 30-year mortgage and 0.6 point on the 15-year loan last week.

"Moreover, for the fourth consecutive quarter, more than 95 percent of prime borrowers who originally had an adjustable-rate mortgage selected a conventional fixed-rate mortgage in the third quarter of this year," Nothaft said.

To see more rates, click on [ID:nWEQ003599].

(Editing by Andrew Hay)