With mortgage rates on the rise, is it prudent to pursue ANY type of adjustable rate mortgage (ARM) at this time? Or should home buyers be scrambling to lock in fixed rates? In a simple world, I'd consider this question to be a slam dunk, until you factor in the various ARM options available on the market (1, 3, 5, 7, 10). The questions is essentially, is it possible to pick an ARM with a front-end period (where the rate stays fixed) that essentially "jumps" over the upcoming rate spike? Naturally, we're talking about rational home buyer options, NOT interest-free or 40-year loans. For the record, the ARM options I was considering were 7/1 and 10/1. Because the first 7 (or 10) years are fixed, I would have assumed both to be a viable option. My thinking was that you'd basically be gambling that rates would be better in 7 or 10 years than they are right now. Is a decade of high rates really a possibility?

I have been pre-approved for a mortgage through my credit union. The loan is a 5-year ARM for 80% of the value, and a 5-year Balloon for 17% of the value, and I am putting 3% down on the house. I am set to close 1 week from today. I have a loan commitment from the lender. I read in the news today that the FED is considering curring interest rates for the money that banks borrow, (which to my understanding is how they set thier interest rates??) by .25 to .50 %. If they do cut rates, would that affect a credit union? Should it lower the rate that I am being offered for my home loan? Would I be foolish to ask my lender (credit union) if my rate goes down? What are your thoughts? Thanks!

I'm on the verge of getting a mortgage and was curious how the rate cut would affect mortgage rates. Is it a direct relationship, like if my rate is 6% today and tomorrow they cut a half point, will tomorrow mortgage rate be 5.5%? I'm looking to do a 30 year fixed with about 50% down and excellent credit, any idea what kind of rate I should be looking to get? Any insight you can offer beofre I take the plunge would be great. Thanks.

We're in the market for a house, and it would seem that the lowering Fed rate would trickle down to the mortgage business. Instead, those rates keep going UP! How do they expect people to help out the economy by buying homes when they keep making it so unattainable and unattractive?