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Answers (12)
- Rudi Hofmann, "LUXURY HOME LOANS CA"
- Contributions:7435
I'm not certain if rates are going up or going down. One thing I'm certain of is Fannie/Freddie (GSE) will not stop increasing fees. The addition of new high fees has already stopped lot's of folks for refinancing.
Effective Monday 6/22: Condos/Co-ops/2nd Homes and Investment Properties with over 70% Loan to Value will have a 2 points cost. On a $500,000 loan thats $10,000 in additional fees.
Who knows what the next additional fee or fee increase will be. If your current rate is doable, lock it. When you lock, you not only lock in a rate, you lock in the guidelines and fees. .... Best wishes, Rudi
Effective Monday 6/22: Condos/Co-ops/2nd Homes and Investment Properties with over 70% Loan to Value will have a 2 points cost. On a $500,000 loan thats $10,000 in additional fees.
Who knows what the next additional fee or fee increase will be. If your current rate is doable, lock it. When you lock, you not only lock in a rate, you lock in the guidelines and fees. .... Best wishes, Rudi
- David Fernandes, "David Fernandes"
- Contributions:37
Watch the 10 year
www.cnnmoney.com
Mortgage rates are closely connected with the 10yr.
If you get something in the ballpark of what you are looking for I would lock. Wells Fargo has a re-negotiation system so if you go through wells you can float the rate down if they adjust after the lock.
www.cnnmoney.com
Mortgage rates are closely connected with the 10yr.
If you get something in the ballpark of what you are looking for I would lock. Wells Fargo has a re-negotiation system so if you go through wells you can float the rate down if they adjust after the lock.
- boem
- Contributions:38
it usually goes up sharply, coming down slowly... that's how market works.. I were you, keep float 1 or 2 wks before closing date... will come down not much.. however, if you are happy with your monthly afford, lock in... depending on loan amount..
good luck... good chase must comes from good catch
good luck... good chase must comes from good catch
- djmjanderson
- Contributions:5
I want to punch the economy in the face! Watch the yields on government bonds, yields up bad, yields down good for you.
- Charlie Sparks, "Charlie Sparks"
- Contributions:73
Lot's of good commentary here wimberlyz. Here's my 2 cents worth....
The interest rates you see quoted by lenders are based on the yields of Mortgage Backed Securities, or MBS, that are traded in the bond market. These traders are very averse to any news that indicate even a hint of inflation. So pretty much any news that shows the economy is rebounding will make MBS yields and mortgage rates increase.
The rule of thumb is:
Good economic news = bad for rates
Bad economic news = good for rates
Even bad economic news can be interpreted as 'good' if it is better than expected. So, for rates to get better we need to see worse than expected figures on areas such as retail sales, industrial production, durable goods orders, CPI, PPI, housing starts, non-farm payrolls et.al. The trend lately has been for better than expected news with pockets of downright good news.
On top of this, the FED has been (and presumably will continue) buying treasury securities at the weekly auctions. This is a 2 sided coin. While creating demand (albeit artificial) pushes the securities price up and yield down in the short term, they are printing money to buy them which is inflationary in the long term.
Oil is also a strong inflationary indicator and the fact that it recently settled at over $70/barrel for the first time since November isn't helping.
I hope I am wrong, but I don't think we'll see 30 year fixed rates in the 4's for quite some time, IMHO.
The interest rates you see quoted by lenders are based on the yields of Mortgage Backed Securities, or MBS, that are traded in the bond market. These traders are very averse to any news that indicate even a hint of inflation. So pretty much any news that shows the economy is rebounding will make MBS yields and mortgage rates increase.
The rule of thumb is:
Good economic news = bad for rates
Bad economic news = good for rates
Even bad economic news can be interpreted as 'good' if it is better than expected. So, for rates to get better we need to see worse than expected figures on areas such as retail sales, industrial production, durable goods orders, CPI, PPI, housing starts, non-farm payrolls et.al. The trend lately has been for better than expected news with pockets of downright good news.
On top of this, the FED has been (and presumably will continue) buying treasury securities at the weekly auctions. This is a 2 sided coin. While creating demand (albeit artificial) pushes the securities price up and yield down in the short term, they are printing money to buy them which is inflationary in the long term.
Oil is also a strong inflationary indicator and the fact that it recently settled at over $70/barrel for the first time since November isn't helping.
I hope I am wrong, but I don't think we'll see 30 year fixed rates in the 4's for quite some time, IMHO.
- BigMoose81
- Contributions:82
I think the main reason in the rise is speculation, not really hard fact evidence to have forseen this rise. Now that it has reason people are able to come up with reasons why.
I think like many others have said, its a gamble you can lock now and not have the fear they go up if you can afford to or you can wait and take your chances.
All depends on what your willing to pay each month.
I think like many others have said, its a gamble you can lock now and not have the fear they go up if you can afford to or you can wait and take your chances.
All depends on what your willing to pay each month.
- Wayne Brown, "SDMortgagefinder"
- Contributions:1433
The general trend over the last two weeks has been a major spike in rates. You've had some good commentary on here as to why.
Even with 38 years in the business, it's difficult to predict rates these days. Now with pressure from Russia and China on the possibility that they will not continue to buy Treasuries, at least for the forseeable future we will have a rising market.
I always tell people if they can live with a rate and payment to lock.
Good Luck
Even with 38 years in the business, it's difficult to predict rates these days. Now with pressure from Russia and China on the possibility that they will not continue to buy Treasuries, at least for the forseeable future we will have a rising market.
I always tell people if they can live with a rate and payment to lock.
Good Luck
- ricon
- Contributions:31
I do not buy if rates are higher than 5.2%
- Salvatore Ruta, "salvatore ruta"
- Contributions:1
Until this country get rid of its reliance on foreign investors to buy its bonds and treasury bills, don't look for too much relief in rates. I'll bet those 30 year backed securities go unsold to creditors like China, and Russia. That means shorter term notes with higher rates to get the cash to fund the massive deficit our wonderful politicians have committed us to.
Don't let anyone kid you, this recovery has a long way to go.
Rates are going up with the new inflation fears!
If you can buy, there are bargains.The difference in an interest rate of 5% vs 5.25% on a 30 mortgage is more psychological and emotional, than meaningful. If that house that was $400,000 a year ago, is now $360,000 what are your waiting for?
Don't let anyone kid you, this recovery has a long way to go.
Rates are going up with the new inflation fears!
If you can buy, there are bargains.The difference in an interest rate of 5% vs 5.25% on a 30 mortgage is more psychological and emotional, than meaningful. If that house that was $400,000 a year ago, is now $360,000 what are your waiting for?
- David Craig, "dlc.usa"
- Contributions:4
See my response to this earlier question. The ramifications of the changes to risk induced by the uncertainly of government interventions are being felt. No one knows what will happen next. How safe is that bond you're thinking about, hmmm? Personally, it makes me extremely bearish.
What's driving mortgage rates up are the looming massive federal deficit, the appearance that the recession is bottoming out, and the fear of inflation. The markets are betting that the Fed is going to start raising key short term interest rates - and soon.
The Fed, on the other hand, has indicated that there is no prospect for an interest rate hike anytime soon. In addition, the housing market is still in trouble, and the Fed has oft said that the key to this economic recovery is to at least stabilize the housing market.
The Fed is now in a pickle. We won't know what direction they will take until after their next meeting on June 23-24. So expect rates to stay up for at least the next two weeks. Whether or not rates will come back down is anybody's guess, but the Fed is not yet halfway through the funds they've earmarked to purchase mortgage backed securities. They are about half way through the funds they've earmarked to purchase treasury bonds.
It appears at this point that in order to bring rates back down, the Fed will have to make a very real concerted effort to purchase more treasuries, notes and bonds. But that will add to the deficit which will cause further rise to the fear of inflation and - well, you get the picture.
None of us have a crystal ball (and if we did, none of would be here!). So, all I can say is stay tuned and watch. If not, then ask yourself this: which is better - lock in now and watch rates go back down or float now and watch rates continue to go up. Usually, it's better to lock in now and watch rates go down rather than float and watch rates go up. If the rates makes sense now, consider locking in and be done with it.
The Fed, on the other hand, has indicated that there is no prospect for an interest rate hike anytime soon. In addition, the housing market is still in trouble, and the Fed has oft said that the key to this economic recovery is to at least stabilize the housing market.
The Fed is now in a pickle. We won't know what direction they will take until after their next meeting on June 23-24. So expect rates to stay up for at least the next two weeks. Whether or not rates will come back down is anybody's guess, but the Fed is not yet halfway through the funds they've earmarked to purchase mortgage backed securities. They are about half way through the funds they've earmarked to purchase treasury bonds.
It appears at this point that in order to bring rates back down, the Fed will have to make a very real concerted effort to purchase more treasuries, notes and bonds. But that will add to the deficit which will cause further rise to the fear of inflation and - well, you get the picture.
None of us have a crystal ball (and if we did, none of would be here!). So, all I can say is stay tuned and watch. If not, then ask yourself this: which is better - lock in now and watch rates go back down or float now and watch rates continue to go up. Usually, it's better to lock in now and watch rates go down rather than float and watch rates go up. If the rates makes sense now, consider locking in and be done with it.
- siddharta
- Contributions:7
Lock now. Rates might go down, but they could also go up way more if this recovery is for real. The trend is now up.
30-year fixed rates - any indication that they'll drop anytime soon?
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