The Federal Reserve once again slashed the federal funds rate on Tuesday from 1 percent down to .25, “aiming to free up lending and jolt the economy back to life,” according to an Associated Press report.

It’s a dramatic move, which caused Freddie Mac mortgage rates to dip to their lowest level since 1971. In fact, 30-year fixed home loan rates can now be locked-in at a staggering 5.19 percent.

That means that homeowners who are facing “balloon” or Adjustable Rate Mortgage (ARM) rate increases — and there is data out there that indicates this could still impact an alarming amount families very soon — can secure more affordable home loans.

In addition, prospective homebuyers can take advantage of the latest-money saving measure. It’s a great opportunity to more than likely get into a home at a reduced price (depending on the local market) and get a loan at a super low rate.

To search the Foreclosure.com nationwide database of more than 1.8 million distressed real estate listing click here.

This is great news that can put a lot of extra cash back in the pockets of so many people. And the way things are right now it appears that every little bit helps and could go a long way.

Therefore, take advantage of this current situation if you can, whether you are a homeowner or homebuyer. Opportunities like this do not come around very often.

To talk to a mortgage professional about a possible refinance click here.

“Subprime” is the 2007 “Word of the Year,” according to a recent article on MSNBC.

It’s a dubious distinction because subprime, according to the The American Dialect Society, is “a risky or less than ideal loan, mortgage or investment.”

Here’s a snip from Professor Wayne Glowka:

“When you have investment companies losing billions of dollars over something like
bundled subprime loans, then you have to consider whether it’s important. You probably also want to think about paying off that third mortgage.” 

Bad subprime loans are a big reason behind the growing foreclosure problem throughout the United States. Homeowners received loans that were either unaffordable from the get-go or were structured with “ballooning” interest rates a few years down the line.

And once those interest rates kick-in, and monthly mortgage payments are all of a sudden much higher, more and more homeowners are feeling the financial pinch.

Here’s to hoping that 2008 is not more of the same.