Posts Tagged ‘Treasury Auctions’

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