Market Update-
Friday June
4th, 2010 5:00 PM ET
Many are wondering if they should make their
Mortgage Application now or wait for possible
lower interest rates. The advice here is to get
your application in and the interest rate
locked. If you can realize significant savings
at current rates, then lock it in. Waiting for
an improvement in interest rates of .125 to .25%
is a big gamble. You may save an extra $49 per
month by getting a .125% lower rate on a $650k
loan, but the fact is, rates have a lot more
room to move higher than they do lower. And this
can certainly cost you.
A Positive day for Bonds and Mortgage rates.
Mortgage Bonds rose sharply Friday as stocks
plunged on renewed European fears and a
disappointing jobs report. But can the gains
realized be sustained? The move upward was
halted at the next ceiling of resistance on the
charts, at the $102.78 level. A break through
this resistance can be good for interest rates.
However, markets remain volatile and can move
bonds back down very quickly, moving mortgage
rates higher.
Remember that mortgage rates rise when the price
of Mortgage Bonds drops. Also, while it may not
always hold true, typically mortgage rates rise
if the stock market is moving higher and drop if
the stock market is moving lower.
The Dow and S&P both lost 2% for the week with
the Nasdaq falling 1.6%. The Dow ended today at
9,931.97 down 323 points, the S&P 500 Index
dropped 38 points to 1,064.88, while the Nasdaq
fell 83 points to 2,219.17. Oil fell $3.10 to
$71.51/barrel on the NYMEX in sympathy with the
malaise in the Stock markets. Next week is short
on economic reports and long on Treasury
auctions as the government will sell $70b in 3
and 10 yr notes along with 30 yr Bonds.
For now we recommend locking into mortgage rates
as Bonds battle a tough ceiling of resistance.
Current Price of FNMA 4.5% Bond:
102.69,+62 bp
ONLY STATE LICENSED
MORTGAGE BROKERS ARE EDUCATED & TESTED.
BANK ORIGINATORS ARE NOT!
TRUST YOUR LOAN ONLY TO A PROFESSIONALLY
LICENSED BROKER!
NMLS # 1375 & 42481
Call for rates on more loan programs not
listed here.
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