Rates Improve – Recommend Locking ; 30 Year Fixed at 4.875%

The bond market ended last week 72 points down , which means rates should be worse.  They are actually better today, partially due to a big rally in the bond market on Friday and Monday and partially to an overaction in pricing when the bond market went down 7 days straight.  Make no mistake though , the long term view is that rates will continue to rise.  You may see rates improve some weeks but it likely won’t counter the rate increase we see in other weeks.  For example , 30 Year Fixed rates improved this week to 4.875% from 5.125%, but two weeks ago rates were at 4.75%.  If you have a beneficial loan available to you now – don’t wait for it to get better – lock it. 

The industry will be changing drastically come April 1st due to new federal regulations on loan officer compensation.  I expect these new regulations to delay closings near the end of March , and into April due to confusion on how to implement the new rule.  The new rule will also likely eliminate options for a consumer.  A consumer will either be paying for

1.)  ALL the loan officers compensation in up front closing costs or

2.)  Be paying none of the loan officer compensation by taking a higher rate. 

Basically , a consumer will have 2 options.  Pay a lot of closing costs up front to get a better rate, or pay little to no closing costs and take a higher rate.  There will be no middle ground – meaning less options for consumers on rates/costs. 

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