Take Advantage of Fixed Rates – Lower Than ARM’s

Freddie Mac recently released their Annual Adjustable Rate Mortgage survey saying that the volume of people who took out an Adjustable Rate Mortgage had seriously declined in the last year. Among the findings of the survey:

• In December of 2008, adjustable rate mortgage share of loan applications had fallen to 3 percent – the lowest percentage on record for the survey.

• As a result of so few people wanting an ARM, fewer lenders offered wide range of ARM products. The "traditional" 1 year conforming ARM was found at approximately 20% of the lenders surveyed — also the lowest percentage on record for the survey.

• "Most" of the ARMs that were originated in 2008 were the 3/1 and 5/1 ARMs – not the 1/1 ARM.

When fixed rates are this low, does it make any sense to go with an adjustable rate mortgage? Looking at today’s mortgage rates below, I can’t think of a good reason that someone would want to go with an adjustable rate mortgage over a fixed rate one if you have the option. Fixed rates are currently lower than adjustable rates!

Arizona Mortgage Rates for February 3 2009