Mortgage rates look to trend up in the next week or so. Ambiguity about the spending/stimulus bill, combined with a massive borrowing effort by the Government, is making it difficult for mortgage rates to stay below 5%. Economic data are still bleak and that should act as a ceiling for mortgage rates in the near-term.
If you’re buying a home, with a conventional loan, you should be able to lock-in 4.875% this morning. I’d take that rate if you plan to close in February. I, like Bill Gross of PIMCO, still think we’ll see mortgage rates at 4.5% again; we might have to go through 5.375% to get there, though.
If you have the time and will, hold out for a better rate. Otherwise, all February closings are best served by locking today.
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- When the Fed Stops Buying Mortgage Bonds, Mortgage Rates Will Go Up. Or Will It? - December 2nd, 2009
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- Categories: Mortgage Rates
Comments
3 Comments so far
Carolyn
our closing date is April 30th. If we lock in now we would have to pay since its more then 60 days out. Should we pay the penalty or wait? I would love to get 4.5.
kevin
You can get as greedy as you would like but you never know what will happen. They said the rates would be 4.5% for the past 2 months. If you like to gamble wait if not lock. For a few dollars a month is it worth the risk.
Brian Brady
“If we lock in now we would have to pay since its more then 60 days out”
That’s a hefty premium you pay for the long lock, Carolyn, isn’t it? I think you’ll be okay if you wait until March to lock. I’m not so sure you’ll get the 4.5% that Bill Gross talks about but you should have a shot at below 5%, when the next cycle happens.
Let’s isolate that, though. How much will it cost you to guarantee a rate under 5% today? If it’s only a few hundred bucks, it might make sense.