Posts Tagged ‘year’

After SEVEN consecutive days of marginal increases, home loan borrowing costs finally stabilized today.  This does not necessarily mean that costs are headed lower, it only implies they're "leveling off" as a high-risk event approaches on Friday in the form of the Employment Situation  Report.

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 fee to permanently buy down your rate  to 4.75% is not worth it to every applicant, 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 4.75%. 15 year fixed conventional loans are best priced at 4.25%. Five year ARMS are best priced at 3.50%.

PREVIOUS GUIDANCE: In the week ahead we are looking for the market to paint a clearer picture of its directional bias.   Locking is advised for those working on a short-term time frame. For long-termers,  if you need to lock a loan in the next month, it's time to shift your bias from aggressive/neutral to defensive/neutral. 

CURRENT GUIDANCE: Even after this week's auction cycle has played out, the market is still giving off the impression that rates are "on a fence" ready to go either way after the Employment Situation Report on Friday.  As always, this is a high risk event.  Such events are nice because they make things easy from a borrowing standpoint.  PART 1: Can't afford or don't want to take a risk?  Lock now...  PART 2: Got lots of time, flexibility, or otherwise not in any particular rush or pressing need to lock a loan?  Feel free to wait it out to see if a longer term rates recovery can materialize, but if you don't like risk, see part 1...

Bonds benefited from a modest flight to safety bid in relatively light overnight trading flows. The 10-year Treasury traded within a range of 3.33% and 3.29% overnight, after finishing one basis point higher at 3.33% on Tuesday.  10s are currently +11/32 at 102-26+ yielding 3.288%. The FNCL 4.5 is +5/32 at 102-02.  And the 2s/10s curve is 3bps flatter at 264bps wide.

Equities are also relatively quiet amid a sea of global uncertainty in Europe, Japan, and the Middle-East. S&P 500 futures are 2.50  points lower at 1,285.75 and Dow futures are off by 22 points at 11,933.

While Portugal’s parliament readies for a vote on the Prime Minister’s austerity plan, investors have shifted concern from Japan back to the Eurozone debt crisis, according to BMO Capital Markets.

“A rejection of that plan could force an early election and the need for a bailout,” the bank said. “Portugal’s credit spreads continue to widen, with the 10-year bond yield hovering above an unsustainable 7.5%.”

They noted that Ireland, which has earlier accepted an EU bailout, saw both its 10- and 2-year bond yields spike above 10%.

Meanwhile, as Colonel Qaddafi continues to resist allied pressures in Libya ― he recently called them “a bunch of fascists” ―light crude oil has passed the $105 mark (up 0.54% overnight at $105.56 per barrel).

Yemen stands on the brink of civil war. Ali Abdullah Saleh, the president for the last 32 years, recently said he would depart in January after organizing parliamentary elections. But the concession ― his biggest yet ― may be too late.

“President Saleh faces a threat from a growing protest movement which in the past few days has been joined by generals, ambassadors, tribal leaders and other senior officials,” the BBC reported.

Global uncertainty is helping gold prices ― currently up 0.42% at $1,433.60 per ounce.

Stocks fell 1.65% in Japan, where officials in Tokyo recently announced that tap water is unfit for babies to drink due to radiation. The news has caused the U.S. Food and Drug Administration to announce restrictions on certain imports. The water reportedly has no immediate health impact to adults.

Shares in China finished 1.03% higher while those in Hong Kong fell 0.14%.

Just in, the MBA Mortgage Application index reported a 2.7% increase in the week ending March 18.

Refinancings and purchases each climbed 2.7% in the week, though purchases remain 15.3% lower than the same period one year ago.

The average 30-year fixed-rate mortgage increased one basis point to 4.80%

Key Events Today:

Provided by Mortgage News Daily

This information is not an advertisement to extend consumer credit as defined by Section 226.2 of Regulation Z. This is not an offer to enter into an agreement regarding interest rates. The rates quoted do not include discount points, origination points, or loan level risk based price adjustments.  Rates and terms are subject to change without notice.