Interest rates on long-term mortgages with fixed rates are edging downward as we move into the new 2008 year.  At the same time, adjustable-rate mortgages are increasing their rates. This opens the door of opportunity a bit wider for today's homebuyers.

"Interest rates on conforming long-term fixed-rate mortgages are at market lows, while rates on one-year adjustable-rate mortgages are increasing," said Frank Nothaft, chief economist for Freddie Mac, a major government-sponsored buyer of existing home mortgages. "The increase in ARM rates is consistent with movement of the yield on short-term Treasury securities that have exhibited higher volatility recently due to market uncertainties."

Even though the number of home sales is down, there are strong advantages for purchasing a home today. Inventories are large, offering the buyer a wide variety of available homes - sellers are highly motivated to negotiate a favorable price and terms - and mortgage interest rates remain at very low levels.  As of 1/9/08 the current market rate is 5.5% with a 680 fico score with 5% down and a loan for 95%.   NOW IS THE PERFECT TIME TO GET PRE-APPROVED AND LOCK IN YOUR INTEREST RATE!

It should be noted that most mortgage borrowers have no problem in keeping their payments current. Most of the problems arise from risky subprime loans and borrowers mortgaging homes that are not their personal residence. Mortgages on non-owner occupied homes accounts for about 13 percent of all prime defaults and 11 percent of subprime defaults nationwide, according to a report from Mortgage Bankers Association.

Call me today to get pre-approved and get the best loan program for you at these historically low rates!

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