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Rates are up again!

Date:October 15, 2008 | Author:Joe Dahleen | Category:Uncategorized

With all of the measures being taken in the market to increase liquidity and with the FED cutting the rates – why are interest rates still moving up? It really does not make sense but then again nothing seems to make sense in this market.

Here is a video link from CNBC this morning with a very interesting chart.

Mortgage rates going up?

If you are the process of refinancing then get your ducks all lined up and have your loan file clear to close before you LOCK and DOC. This way you can time the market to take advantage of the lowest possible rate and take the shortest term LOCK and save more money. So keep your eye on the 10 year treasury rates.

All brokers and lenders have the ability to lock loans for 10 days or 15 days. You don’t always need to lock for the full 30 day lock. Today you would save about .375 basis points in fee for a shorter term lock.

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Responses (0)

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Andrew Adams 6:51 PM - Oct 15,2008

Joe,

Why would you keep an eye on the 10 year treasury?
Daryle M 11:22 PM - Oct 15,2008

I agree with Andrew why would we watch the 10 year treasury? Mortgage professionals track mortgage back securities. Also, Joe when the fed reduces the federal funds rate it generally has a negative impact on the long term rates. So it makes perfectly good sense that rates are going up. The reason…in the event you care to know is simple, when the fed reduces the federal funds rate it generally lowers the value of our dollar thus creating a inflationary environment. However, because this is now a global economy and all financial markets around the world are suffering they are coordinating rate cuts with other countries which should help eliminate inflationary pressure! So while markets may have a knee jerk reaction to a rate decrease by the fed…the strategic effort of all countries lowering interest rates helps keep the dollar strong and eases inflationary pressure. Remember the US consumer, consumes more foriegn goods than any other country and is vital for foreign markets to keep our dollar strong sowe continue to consume and buy their products. Sure would be nice for he consumer to recieve accurate information!

Regards,

DM