If you're really really interested in how home loans work, are originated, sold on the secondary market, etc., there is a great post here.
Consequently, looks like mortgage rates, for folks with decent credit, are falling back down to reasonable levels. Quite the summer spike up around 6.75% and now back down to 6.00%, but yeah, don't even think about ARM's, they are priced not to sell with rates the same as the fixed.
