MORTGAGE RATES IMPROVE – 30 YEAR FIXED TO 3.25%
October 15th, 2012
The MBS market closed last week trading (+ 12 bps).
So far on Monday – the MBS market is trading down (-12 bps).
Rates went up for 5 straight days and then we were able to recover with some positive MBS trading days. There shouldn’t be any change in rate pricing from last week, but we saw a pretty good improvement in both rates and pricing this week. Some lenders react differently to the market than others.
To start off this week, the market received earning results from retail and auto companies that exceeded forecasts. This has caused the stock market to trade higher and rate pricing to be a bit higher.
The big events this week include the Presidential Debate on Tuesday. The market always seems to react to the debates the next day. Also, later in the week the European Union is holding a summit. Although Europe is still nowhere near a resolution to their debt problems, there are positive signs showing that progress is being made.
I recommend locking at this point. There will be a lot of uncertainty with the upcoming election. Rates are very close to all time lows. Below are some lock perspectives from different originators for Mortgage News Daily. I agree with Tim Elkins in that if you can refinance with $0 costs and lower your rate – it is worth doing. There are no prepayment penalties, so you can refinance again if they go lower.
Loan Originator Perspectives from http://www.mortgagenewsdaily.com.
“To be honest, my personal opinion says rates to go higher. Maybe a “late year” stock market rally as well as election results. Things “need” to look like all is good in the markets. As a result, I think rates go slightly higher. I doubt we see sub 3.25% rates….but you never know! Regardless, rates are incredibly low. Worst case is you do a “no cost loan” now…and rates fall….and you do it again! Good luck….” –Tim Elkins, CEO, Crossline Capital.
“Rates were better this morning and have just recently (as of 11:25 am PT) gotten worse as mortgage bond (MBS) selloff has gained steam in the last half hour. With this morning’s rate improvements on top of yesterday, we were able to lock some clients who had established target rates and were therefore ready to go. Now, unless we get a sharp reversal into positive territory, we’ll hold on locking anyone else until Monday. This is a good reminder to clients that rates move in real time throughout each MBS trading day. When it’s volatile like this, clients need to have target rates that they can’t or won’t go above, and give lenders standing orders to lock those rates when they become available. ” -Julian Hebron, Branch Manager, Loan Agent, RPM Mortgage
With the below rates, I have added to the rate breakdown for $0 cost loans. Just to clarify, 0 points does not necessarily mean $0 fees completely. In the rates below, I clarify the rate I can usually get someone with 0 points and $0 costs. This does vary by area depending on title fees and transfer taxes the county may charge.
My vest value of the week:
15 Year Fixed at 2.99% paying $0 costs
Below are rates available today paying a point or less:
30 year fixed: 3.25% paying .44 points, 3.375% paying 0 points, 3.625% – $0 costs
20 year fixed: :3.25% paying .184 points, 3.375% paying 0 points, 3.5% – $0 costs
15 year fixed: 2.5% paying .752 points, 2.75% paying 0 points, 2.99% – $0 costs
5/1 ARM: 2.25% paying .79 points, 2.5% paying 0 points
7/1 ARM: 2.375% paying .99 points, 2.75% paying 0 points
30 year fixed High Balance Loan: 3.5% paying .13 points; 3.625% – $0 costs
30 year fixed FHA: 3.25% – $0 costs
15 year fixed FHA: 2.75% – $0 costs
30 year fixed VA: 3.25% – $0 costs
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Mortgage Rates Improve – 30 Year Fixed to 3.25%