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We are preparing to purchase a home in Los Angeles but dont know if we should buy now or later because the mortgage rate has spiked recently. I understand that historically its still low, but this is a new world with new rules. With that said, will mortgage rates ever dip back down again to the 5% level?
Someone with more knowledge will more than likely chime in, but with just talking with my mortgage broker today FHA's were still up around 5.75 or so w/ no points. I'm sure it varies by locations, and of course what type of financing. It's hard to guage what it will do.
tied to the bond market, blah, blah, blah... FWIW, a few brokers have told me that things get more competitive a the end of the month...
WF had been quoting me 5.75 this week.
Another broker got competitive so I bit the bullet and locked with him at 5.5% FHA - no points, no origination fee. Next day it spiked to 6.0! Back down to 5.875 (using WF online as an example). If I pay a point, I can save another .335. I will likely do that.
I'm being quoted at around 5.625 with no points...I dont get this....why would they raise mortgage rates of all thngs at such a critical juncture?
they dont have as much control as they like to think they do. not until they destroy the private sector (which they are trying to do). the government can only withstand a certain debt load before its debt is too much for investors to be comfortable with. so with the additional risk comes higher rates.
2 days ago was the best lock in rate since the 4's disappeared a few weeks ago. I was still 5 days away from my 30 day lock but my mortgage broker locked in a 30 day rate for me today at 5.375 w/ no points, so we'll see what the market does over the next few weeks, but with government debts for sale next week, I expect rates to go up as the yield percentage increases.
Mortgage rates have moved higher due to 2 main factors. Number 1, optimisn the end of the recession is near. Thus investors sell their low yielding but safe fixed income investments to move the money to higher yielding stocks. Number 2, massive amounts of treasuries being issued to fund the govt spending spree. Mortgage rates are tied to mortgage backed securities and not treasuries, however, they are both related(both a fixed income investment). With more and more supply of treasuries to be auctioned, how do you attract buyers? You increase the yield. Yield equates to mortgage rates. As the yield on treasuries move higher, mortgage rates move higher as well.
Doesn't seem fair that mortgage rates are tied to national trends and my market is very local. No sign of the economy improving here (#1 in unemployment) and this certainly doesn't help matters. Not that the rates are high compared to previous years, but even the small difference in the monthly payments = a LOT more coupon cutting!
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