Lending Landscape - October 11, 2007

The lending landscape is shaping up to be more favorable to prospective homeowners. Despite interest rates increasing slightly in the last week, they are at nearly the same point they were a year ago.

The government-sponsored loan buyer said the rate on a 30-year fixed-rate loan averaged 6.4 percent for the week ended Oct. 11, up from 6.37 percent last week.

Last year at this time, 30-year mortgage rates averaged 6.37 percent.

15 year fixed loans stayed at the same rate they were last year, while adjustable rates moved up very slightly.

The release of the Fed's minutes from its previous rate meeting calmed Wall Street, though decreased chances for further rate cuts of adjustable and short term loans. The bond market which affect fixed rates have moved up, but only slightly in this holiday shortened week.

Most importantly for prospective homeowners is the psychology of the credit markets has improved. Increased liquidity has removed many of the credit crunch fears of the past few months though increased foreclosure activity continues to be a threat.

There's good and bad in this lending landscape forecast, but for those borrowers with good credit, rates are still favorable on fixed rate loans. Many Utahns can also qualify for FHA loans for first time homeowners and those with a few spots on their credit history.