Mortgage rates to decline further (loan, interest rate, mortgage companies, rate)

[ocean2026]

Rates have declined the past few days and with the Fed promising to become active in the mortgage securities market - they will continue to slide.

I may have made a mistake by jumping on a 15 yr note because when rates are this low, having the money for 30 years is actually better.

I need cash pretty soon or I would have waited another month or two.

[Snafu]

I ended up locking in on 4.25% for a 30-year refinance, even though I hear that rates can still go down. The problem that folks will be facing now is that so many people are jumping on the refi and purchase bandwagon that appraisals are starting to back up, so getting a refi closing done in 30 days might be tough. Some places will not even quote 30-day locks for refinances.

You can never trust the conventional wisdom, though, and even if rates go lower I am more than happy with this rate and no ulcers with either wondering if I should make the call or regrets if the conventional wisdom is wrong and I missed the boat.

I agree with you on the time frame, though. For this rate, the combination of tax deduction and having the extra $$$ to put cash away for renovations and keep a comfortable buffer over the coming years suits me fine. I have no expectations of losing my job, but having a VERY low mortgage payment if the worst happens cannot be a bad thing. If interest and/or stock rates start going up, then i'll have the extra to put aside for investments above the mortgage rate. Since I have no plans to sell my home in the next 20+ years, I am not so worried about paying down principal to come out ahead if/when I sell.

All that being said, I am no longer hunting through rates and quotes ... I don't NEED to know if I could have waited.... you know?

[ocean2026]

Yes Snafu - I understand and basically agree. I do think though that unlike other government intervention with all sorts of unintended consequences, false promises and suspect motivations, being active on the buy side in the mortgage securities market will make the rates go down. Here its a simple supply-demand issue.

FT.com / Companies / Financials - US poised for sharp dip in mortgage rates


Here's another released today 4:PM EST

Mortgage rates fall to record low again - Forbes.com (http://www.forbes.com/feeds/ap/2009/01/08/ap5897122.html - broken link)

Home prices will continue to slide so my guess would be buying a home and getting a mortgage would be best done this fall. Refis - perhaps in a couple of months.

[SmartMoney]

This is a weekly running tally. By the time these tallies hit the news desks, it's old. It's the classic example of "buy on the rumor, sell on the news." Translation, by the time it hits the press, it's history. If the argument was reversed (rates are up per Forbes) and there was a rally, the unwitting consumer would have lost out on a lower quote.

Here is today's MBS report on today's trading:

Mortgage bond prices closed below the levels where daily pricing was set applying upward pressure on mortgage rates. Rates were under pressure as traders prepare for an action packed Friday when the jobs report will be released.

At the open, bonds received support from the news that Wal-Mart same store sales were lower than expected. Wal-Mart has been a bright spot in the stock market rout seen in 2008. Now traders are concerned more bad news is to come. Funny how sentiment changes so fast, at the beginning of the week traders were selling Treasury bonds opting for riskier assets in the hopes the worse may be over. This goes to show how easily the market can swing.

In news released this morning, weekly jobless claims fell to 467k, better than expected. Trades overlooked this data opting instead to see what the employment report brings tomorrow. Also, the 10-year Treasury auction was well bid, thank goodness.

I urge everyone to use caution - I am not saying the news is wrong, I am saying it's late.

[ocean2026]

Well rates have declined since I started this thread but still expect further downward activity.

[HappyTexan]

Yes, but refi's are what's happening and then, only those that qualify and have equity and appraised value over their current mortgage.

New mortgages are running a far second. Soon the refi market will slow down and then what happens ?

[newhomebuyer80]

Over the last week, Mortgage rate is increase by 0.45% from Amegy bank and Bank of america by 0.3%

[SmartMoney]

And they will continue to go up and down. Just realize by the time it's heard on the news "rates are down" or "rates are up," it's stale and in many cases have already reversed.

When Ocean2026 had heard rates were down, they were already heading back to the point where newhomebuyer had seen the increase. Normally, if it were something like oil or gas, something that did not impact what you are doing right then and there, the acuracy wouldn't matter one bit....but locking an interest involves real time information, information that is not readily available to the consumer.....even those of us in the business have to subscribe to the get the information.

[SummerSurana]

Adding to this the interest rates for 30 yrs fixed had gone up to 5.75% after the gov provided bail out to BOA. However mortgage companies are expecting them to come down to 4.875 to 5% in few days. But you never know, things change so rapidly in this market and moreover the interest rates change every 2-3 hrs so really one should not expect anything.

Only if your rate is locked for at least 30 days then you can take a sigh of relief that your mortgage will be refinanced at a particular given rate. Again it depends on whom you are working with as some of the companies take more than 30 days to close (depends on the complexity of the loan).

[le roi]

For a new 30-year loan w/ 20% down in my area, I saw rates of 4.77% last week. This week, so far, the same banks are showing 5.1%.

If rates change so quickly, when exactly does a lending institution determine your rate?