Posts Tagged ‘30 year fixed mortgage’

Home loan borrowing costs improved slightly today, though Best-Execution rates remained the same.

Nervous tensions surrounding the potential economic impact of the earthquake in Japan sent a shockwave through global markets today. U.S. stocks suffered and as is often the case during equity sell-offs, bond markets benefitted, including those that directly influence mortgage rates.

CURRENT MARKET: The "Best Execution" conventional 30 year fixed mortgage rate is still 4.875%.  For those looking to permanently buy down their rate to 4.75%, this quote carries higher closing costs. The upfront cost of permanently buying down your rate  to 4.75% is not worth it to many applicants, we would generally only advise the permanent floatdown if you plan to keep your new mortgage outstanding for longer than the next 10 years.  Ask your loan officer to run a breakeven analysis on any origination points they might require to cover permanent float down fees. On FHA/VA 30 year fixed "Best Execution" is still 4.75%. 15 year fixed conventional loans are best priced at 4.125%. Five year ARMS are best priced at 3.50%.

CURRENT GUIDANCE: Today is one of two days this week  where no economic data was available to drive the markets, the other being this Friday.  As such, bond markets and therefore, mortgage rates, were tied to movements in the stock market more closely.  With Japanese stocks taking what will probably be their single biggest day of earthquake-related losses (over 6%), it's no surprise that money flowed out of stocks and into bonds.  The gains seen today are STILL not enough to consider mortgage rates "UNSTUCK" though.  So with a high-risk event ahead (FOMC meeting tomorrow) and densely packed economic calendar in the middle of this week, we see no reason to change our current guidance.  Our willingness to consider a long term rate recovery is the same, but there are many reasons to remain defensive of the positive progress that has helped rates move to one-month lows.  While it's true that rates can move either direction, they can get worse much faster than they can get better right now.

Plain and Simple: We're going to need a sustained bond market rally to see "Best Execution" break through the 4.875% barrier. Otherwise this is as good as it gets.

FULL CALENDAR OF EVENTS IN THE WEEK AHEAD

Consumer borrowing costs lost a very small amount of ground today.  Mortgage rates are still about aggressive as they've been since late January though....

CURRENT MARKET: The "Best Execution" conventional 30 year fixed mortgage rate is still 4.875%.  For those looking to permanently buy down their rate to 4.75%, this quote carries higher closing costs. The upfront cost of permanently buying down your rate  to 4.75% is not worth it to many applicants, we would generally only advise the permanent floatdown if you plan to keep your new mortgage outstanding for longer than the next 10 years.  Ask your loan officer to run a breakeven analysis on any origination points they might require to cover permanent float down fees. On FHA/VA 30 year fixed "Best Execution" is still 4.75%. 15 year fixed conventional loans are best priced at 4.125%. Five year ARMS are best priced at 3.50%.

GUIDANCE:  The failure of the bond market to extend its recent rally really serves to drive home a point we've been harping on for several weeks now: WE'RE STUCK.  If you're floating, you're doing so for marginal improvements in UPFRONT COSTS ....not RATE. See disclaimer below please. When it comes to the outlook for lower rates in the months ahead, we're still optimistic about that expectation but realize it will require a steady drip of bond friendly (economy unfriendly) news and events for that call to come true.  In the short-term, or at least until "the levy breaks" or all hell breaks loose around the planet, we don't expect lender rate quotes to look much better than they do right now.  The following comment hints at the commitment required from bond market investors if we're going to see mortgage rates to move notably lower.

From: Mortgage Pricing Hits Wall. Loan Demand Declines...

"Lenders have moved the Best Execution 30-year fixed note rate as low as they possibly can without drastically altering their pipeline hedging strategies.  This is a factor of what production mortgage-backed security coupon is most liquid in the secondary mortgage market. On conventional loans, the 4.50 percent MBS coupon is the hedging vehicle of choice for lock desks.  Home loans with note rates between 4.875 and 5.25% are generally used to fill 4.50 percent MBS coupon trades. Until MBS investors demonstrate sustainable demand for 4.00 percent 30-year fixed MBS coupons, lenders will not find it economically efficient to quote 4.75 percent note rates without expensive permanent buydown costs. From that perspective, if you are floating a conventional home loan interest rate, you should not be expecting further improvements to your actual rate in the short term. If the bond market recovery rally continues, closing costs will improve, but on the whole, it will take a sustained move higher in 4.00 percent MBS coupon prices for Best Execution to dip below 4.875 percent."

Plain and Simple: We're going to need a sustained bond market rally to see "Best Execution" break through the 4.875% barrier. Otherwise this is as good as it gets.

Consumer borrowing costs lost a very small amount of ground today.  Mortgage rates are still about aggressive as they've been since late January though....

CURRENT MARKET: The "Best Execution" conventional 30 year fixed mortgage rate is still 4.875%.  For those looking to permanently buy down their rate to 4.75%, this quote carries higher closing costs. The upfront cost of permanently buying down your rate  to 4.75% is not worth it to many applicants, we would generally only advise the permanent floatdown if you plan to keep your new mortgage outstanding for longer than the next 10 years.  Ask your loan officer to run a breakeven analysis on any origination points they might require to cover permanent float down fees. On FHA/VA 30 year fixed "Best Execution" is still 4.75%. 15 year fixed conventional loans are best priced at 4.125%. Five year ARMS are best priced at 3.50%.

GUIDANCE:  The failure of the bond market to extend its recent rally really serves to drive home a point we've been harping on for several weeks now: WE'RE STUCK.  If you're floating, you're doing so for marginal improvements in UPFRONT COSTS ....not RATE. See disclaimer below please. When it comes to the outlook for lower rates in the months ahead, we're still optimistic about that expectation but realize it will require a steady drip of bond friendly (economy unfriendly) news and events for that call to come true.  In the short-term, or at least until "the levy breaks" or all hell breaks loose around the planet, we don't expect lender rate quotes to look much better than they do right now.  The following comment hints at the commitment required from bond market investors if we're going to see mortgage rates to move notably lower.

From: Mortgage Pricing Hits Wall. Loan Demand Declines...

"Lenders have moved the Best Execution 30-year fixed note rate as low as they possibly can without drastically altering their pipeline hedging strategies.  This is a factor of what production mortgage-backed security coupon is most liquid in the secondary mortgage market. On conventional loans, the 4.50 percent MBS coupon is the hedging vehicle of choice for lock desks.  Home loans with note rates between 4.875 and 5.25% are generally used to fill 4.50 percent MBS coupon trades. Until MBS investors demonstrate sustainable demand for 4.00 percent 30-year fixed MBS coupons, lenders will not find it economically efficient to quote 4.75 percent note rates without expensive permanent buydown costs. From that perspective, if you are floating a conventional home loan interest rate, you should not be expecting further improvements to your actual rate in the short term. If the bond market recovery rally continues, closing costs will improve, but on the whole, it will take a sustained move higher in 4.00 percent MBS coupon prices for Best Execution to dip below 4.875 percent."

Plain and Simple: We're going to need a sustained bond market rally to see "Best Execution" break through the 4.875% barrier. Otherwise this is as good as it gets.

Fence-sitters today got their first taste of a series of moderately risky events that face mortgage rates in the days ahead, Treasury auctions!

The day started with loan pricing looking basically unchanged vs. the quotes offered by lenders yesterday, but conditions deteriorated leading into the first  government debt auction of the week and lenders were forced to reprice for the worse. Although the actual auction itself was strong, it failed to motivate a recovery rally in the bond market and consumer borrowing costs edged higher. Best Execution did not change though.

CURRENT MARKET: The "Best Execution" conventional 30 year fixed mortgage rate is still 4.875%.  For those looking to buy down their rate to 4.75%, this quote carries higher closing costs. The upfront cost of permanently buying down your rate  to 4.75% is not worth it to many applicants. We would generally only advise the permanent floatdown if you plan to hold your new mortgage for longer than the next 10 years.  Ask your loan officer to run a breakeven analysis on any origination points they might require to cover permanent float down fees. On FHA/VA 30 year fixed "Best Execution" is still 4.75%. 15 year fixed conventional loans are best priced between 4.125% and 4.25%, but 4.25% is more efficient in terms of the floatdown breakeven cost. Five year ARMS are best priced at 3.625%.

PREVIOUS GUIDANCE:  "Current Market" is as good as it gets for at least the next week. We are encouraged by the behavior of the bond market but remain defensive.   READ MORE: LOAN PRICING STALLED

NEW GUIDANCE:  "Current Market" is as good as it gets for at least the next week though. We are encouraged by the behavior of the bond market but remain defensive. If your time frame is longer term or situation not urgently requiring a mortgage, floating prospects this week are better than they were heading into last week's Employment Situation Report

Fence-sitters today got their first taste of a series of moderately risky events that face mortgage rates in the days ahead, Treasury auctions!

The day started with loan pricing looking basically unchanged vs. the quotes offered by lenders yesterday, but conditions deteriorated leading into the first  government debt auction of the week and lenders were forced to reprice for the worse. Although the actual auction itself was strong, it failed to motivate a recovery rally in the bond market and consumer borrowing costs edged higher. Best Execution did not change though.

CURRENT MARKET: The "Best Execution" conventional 30 year fixed mortgage rate is still 4.875%.  For those looking to buy down their rate to 4.75%, this quote carries higher closing costs. The upfront cost of permanently buying down your rate  to 4.75% is not worth it to many applicants. We would generally only advise the permanent floatdown if you plan to hold your new mortgage for longer than the next 10 years.  Ask your loan officer to run a breakeven analysis on any origination points they might require to cover permanent float down fees. On FHA/VA 30 year fixed "Best Execution" is still 4.75%. 15 year fixed conventional loans are best priced between 4.125% and 4.25%, but 4.25% is more efficient in terms of the floatdown breakeven cost. Five year ARMS are best priced at 3.625%.

PREVIOUS GUIDANCE:  "Current Market" is as good as it gets for at least the next week. We are encouraged by the behavior of the bond market but remain defensive.   READ MORE: LOAN PRICING STALLED

NEW GUIDANCE:  "Current Market" is as good as it gets for at least the next week though. We are encouraged by the behavior of the bond market but remain defensive. If your time frame is longer term or situation not urgently requiring a mortgage, floating prospects this week are better than they were heading into last week's Employment Situation Report

CURRENT MARKET: The "Best Execution" conventional 30 year fixed mortgage rate is 4.875%.  For those looking to buy down their rate to 4.75%, this quote carries higher closing costs. The upfront cost of permanently buying down your rate  to 4.75% is not worth it to many applicants. We would generally only advise the permanent floatdown if you plan to hold your new mortgage for longer than the next 10 years.  Ask your loan officer to run a breakeven analysis on any origination points they might require to cover permanent float down fees. On FHA/VA 30 year fixed "Best Execution" is still 4.75%. 15 year fixed conventional loans are best priced between 4.125% and 4.25%, but 4.25% is more efficient in terms of the floatdown breakeven cost. Five year ARMS are best priced at 3.625%.

PREVIOUS GUIDANCE:  The conventional 30-year fixed Best Execution note rate has fallen to 4.875%. Consumer borrowing costs have almost recovered fully from the mid-week hiccup we experienced on Wednesday and Thursday. There is still work to done, but after reprices for the better were awarded today by lenders, we're just above one-month lows. The bond market is still in limbo in terms of an extension of the recent rally. Approach floating from a defensive posture, especially after Best Execution improved to 4.875% this week because it's going to take a sustained rally in the bond market before Best Execution reaches 4.75%. That means current market is likely as good as it gets for at least the next week. If you don't have more than a week to float your loan, you should be locking very soon.

NEW GUIDANCE: No Change. Same as Friday. "Current Market" is as good as it gets for at least the next week. We are encouraged by the behavior of the bond market but remain defensive.   READ MORE: LOAN PRICING STALLED

It was a volatile week for mortgage rates.

Monday and Tuesday saw rates near their best levels in nearly a month.  Consumer borrowing costs then got beat up on Wednesday and Thursday, so much that we had to up the "Best Execution" 30-year fixed mortgage rate to 5.000%.  That's where we last left you, just ahead of today's high risk event: The Employment Situation Report

CURRENT MARKET: The "Best Execution" conventional 30 year fixed mortgage rate has fallen BACK to 4.875%.  For those looking to buy down their rate to 4.75%, this quote carries higher closing costs. The upfront cost of permanently buying down your rate  to 4.75% is not worth it to many applicants. We would generally only advise the permanent floatdown if you plan to hold your new mortgage for longer than the next 10 years.  Ask your loan officer to run a breakeven analysis on any origination points they might require to cover permanent float down fees. On FHA/VA 30 year fixed "Best Execution" is still 4.75%. 15 year fixed conventional loans are best priced between 4.125% and 4.25%, but 4.25% is more efficient in terms of the floatdown breakeven cost. Five year ARMS are best priced at 3.625%.

OUR GUIDANCE LAST FRIDAY: The bond market is still in limbo in terms of an extension of the recent rally. Approach floating from a defensive posture, especially after Best Execution improved to 4.875% this week because it's going to take a sustained rally in the bond market before Best Execution reaches 4.75%. That means current market is likely as good as it gets for at least the next week. If you don't have more than a week to float your loan, you should be locking very soon. As you can see in the chart above, it's been almost a month since rates were this aggressive. And we wouldn't be surprised one bit if the market pushes back against the recent mortgage rates rally next week. Profit taking is a naturally occurring event whenever interest rates move lower.

NEW GUIDANCE: Phew!  We dodged a bullet today. The conventional 30-year fixed Best Execution note rate has fallen to 4.875%. Consumer borrowing costs have almost recovered fully from the mid-week hiccup we experienced on Wednesday and Thursday. There is still work to done, but after reprices for the better were awarded today by lenders, we're just above one-month lows.  BEYOND THAT...same exact guidance as last Friday!