May 13th, 2010 Mortgage Market Update by Brian Cavanaugh

Mortgage Market


Mortgage Markets have gone up a bit the past 24 to 48 hours. The European bailout will have a ton to do with what happens with markets in coming weeks. Mortgage rates are going up and down based on the guidance they get from headline news and the stocks. With mortgage rates down near the low of the year, I love LOCKing all loans closing in the next 30 to 45 days. Borrowers closing in more than 30 to 45 days should consider paying the extra costs to secure a longer term lock. Most Lenders will charge a 0.25% fee (based on your loan amount) to lock in your loan for more than 45 days. On a $300,000 loan, that is an extra cost of $750 which is a small price to pay over the life of your loan if rates do increase in the next 45 days. In I think they certainly will.

The par 30 year conventional rate mortgage remains in the 4.75% to 5.00% range for well qualified borrowers. To secure a interest rate on a conventional mortgage you must have a FICO credit score of 740 or higher, a loan to value at 80% or less and pay all closing costs including an estimated 1 point discount fee. For consumers with lower FICO scores (700 and less) and higher loan to values, you should consider an FHA loan.



Inquire within for current Mortgage Interest Rates. bc@SmarterBorrowing.com  617.771.5021

Economic Data

Wednesday's bond market opened in negative territory following early stock strength. The stock markets are showing noticeable gains with the Dow and Nasdaq up. The bond market is currently down, but we still may see a slight improvement in this morning's rates as a result of strength late yesterday afternoon.

10-year Treasury Notes will be sold today and could impact bond prices and mortgage rates. The 30-year Bond sale will take place tomorrow. Results of the auctions will be posted at 1:30 PM ET each day.

There is no relevant economic data scheduled for release tomorrow, except for weekly unemployment figures from the Labor Department. They are expected to announce that 440,000 new claims for unemployment benefits were filed. It will likely take a much larger or smaller figure for this report to affect mortgage rates tomorrow morning. I don not expect this to have much weight.

The remaining three economic reports will be released Friday morning. This is when we will get April's Retail Sales data (very, very, very important!), April's Industrial Production ( important) and May's University of Michigan's Index of Consumer Sentiment ( important).



FLOAT or LOCK

If I was closing on a Home Mortgage in the next 0 to 15 Days - LOCK

If I was closing on a Home Mortgage in the next 15 to 30 Days - LOCK

If I was closing on a Home Mortgage in the next 30 to 60 Days - LOCK

If I was closing on a Home Mortgage in the next 60+ LOCK

This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

• Are you a possible Massachusetts First Time Homebuyer?

• Do you have a Real Estate client inquiring about current Mortgage Rates?

• Do you have any Refinancing questions?

• Should you be thinking about Refinancing out of your ARM (Adjustable Rate Mortgage)?

• Have your Real Estate clients been Pre Approved?

bc@SmarterBorrowing.com  617.771.5021

Credit: Bloomberg, Yahoo Finance, Mortgage News, MBS Quoteline, WSJ, NY Times

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