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Mortgage Rate History Graph

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									Recent Mortgage Rate Trends and Their Effect on You
                                            Beginning of December 2007

Are you missing the signs of opportunity in the current real
estate market? Don’t be caught overlooking the present, or
          you’ll have to see it in hindsight later!
                                                                                 GRAPH: Six-Month Timeframe
The Short Report                                                                 30 Year Fixed Mortgage Rate
• The US Government has made significant steps in its plans to help
   struggling home owners, says Treasury Secretary Henry Paulson
   recently. Discussion of freezing rates for some home owners who
   have an ARM reset has been the key topic, but there are many
   details still to be worked out.

•   Most investors and financial markets expect the Federal Funds Rate
    to decline over time to 3.5%, a reduction of 1.0% from its current
    level of 4.5%.

•   Real estate prices are coming down, interest rates are low and
    potentially still declining, national programs are being put in place
    to help home owners with ARM resets and if you can legitimately
    afford a mortgage then you’re going to be able to get an excellent
    loan. Is this a time to warm up your crystal ball to start looking
    for the bottom of the market? Read on…

In Greater Depth
Even if real estate prices fall another 10% over the next 12 months (which equates to $50,000 on a $500,000
house), that still isn’t as low as the very lowest end of the current real estate market, which is selling at up to 20%
below currently appraised value in market panic situations. This means a $400,000 house bought at a steal for
$320,000 today could be worth $360,000 when the market bottoms out. Who would have thought this much
instant equity could be found in today’s environment!

At the lowest point in mortgage history, a 30 year fixed conforming loan (loan amount under $417,000) was
around 5.0%. In the last couple of weeks, the rate for the same loan has fallen as to 5.75% for well qualified
borrowers! For those looking for signs of opportunity in the real estate market, the current mortgage rate
environment is like a big neon sign saying “Opportunity, look here!”

If you’re really waiting for a “bottom” where all of the negative press suddenly becomes positive news, don’t hold
your breath. By the time investing in real estate is the popular thing to do again, the bottom will be in the rear
view mirror.

To those who have been hiding on the sidelines, though, it could be almost time to say “it’s ok to come out now!”

                            Is your mortgage broker an expert on economic trends and
                                     a trusted adviser to you and your clients?
                                       Contact Wesley Lindquist, CPA today

                                        Your Trusted Financial Partner

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