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
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