MORTGAGE RATES

Rates on 30-year mortgages dropped this week to the lowest point in four months – an average of 6.31 percent for FRMs – providing some relief for people hoping to refinance or buy a new home.

Read the full story:
http://www.floridarealtors.org/NewsAndEvents/n1-091407.cfm

Stating the obvious, low mortgage rates allow people to afford more home. Also in this time of lots of people being stuck in those many times nasty "Option Arms" here's a chance to get out and refinance at low rates.  Those Option payment ARMS were an OK (note I didn't say a GOOD idea just an OK idea) when homes were surely appreciating. But now with the market not only flat but in many cases falling they can be downright dangerous. When you decide to send the smallest payment option in any given month you just know that that payment doesn't cover your principle, interest, taxes and insurance. That means that when it doesn't the additional interest you didn't pay but should of still accrues - and your unpaid balance is going UP (that's called Negative Amortization!). Even while the market price of the house might be going DOWN.  So take the news that interest rates are falling and if you don't have some awful prepayment penalty (and if you DO have an awful prepayment penalty you should be wary of the persons who put you IN that product in the first place!) - look at refinancing now to a lower FIXED (see that word in CAPS - that's FIXED) rate.  - Mike W