A Wild, Wild Week With Massachusetts Mortgage Rates: Mortgage Rate Lock Advisory for Nov. 17, 2010

by Rich Vetstein on November 17, 2010 · 0 comments

in Mortgages

Mortgage Guy Brian Cav has been riding the Massachusetts mortgage rate roller coaster this week! Seems like the Fed’s new Quantitative Easing II policy has got the market jumping all over the place. Well, here’s the lowdown from BC:

Brian Cav

Wow, I am at a lack of words for what has happened over the past week with Mortgage Rates. Rates have changed up to 5 times per day since last Wednesday. We are just now starting to see some stabilization after a week of bad mortgage market losses.

Most Lenders are offering 4.25% with 1 point of origination for a 30 year fixed with standard costs. The same can be said at 3.75% for a 15 year fixed. You must have a 740 FICO credit score or better and enough equity in your home to refinance or standard down payment requirements on a purchase. Jumbo 30 year and 15 year fixed along with 5/1 ARMs are very near all-time lows as of today. Jumbo Mortgage financing requires a 80% loan to value or a 20% down payment on purchases.

Inquire within for current Mortgage Rates or guidelines at bc@SmarterBorrowing.com 617.771.5021

Economic Data

Wednesday’s bond market has opened in positive territory following the release of favorable economic data and a relatively flat open in stocks. The stock markets don’t appear ready to rebound from yesterday’s selling with the Dow up and the Nasdaq up. The bond market is currently up 5/32, which with yesterday’s afternoon strength should improve this morning’s mortgage rates by approximately .25  of a discount point over yesterday’s morning pricing.

There were two reports posted this morning. The first was October’s Consumer Price Index (CPI) that showed weaker than expected inflation readings. The Labor Department said that the overall CPI reading rose 0.2% and that the core data was unchanged from September’s level. Both of these readings were just shy of forecasts, meaning inflationary pressures were not as strong at the consumer level of the economy as many had thought. That is good news for the bond market and mortgage rates, but did not come as too much of a surprise after yesterday’s PPI numbers.

The Commerce Department gave us today’s second piece of data. They announced that construction starts of new homes fell 11.7% last month, falling to their lowest level in the past year and a half. This is favorable data for the bond market and mortgage rates since it indicates housing sector weakness. Unfortunately, the data is not considered to be highly important, preventing it from influencing this morning’s mortgage rates by much.

The final monthly report of the week will come from the Conference Board late tomorrow morning when they release their Leading Economic Indicators (LEI) for October. This is a moderately important report that attempts to predict economic activity over the next three to six months. It is expected to show a 0.6% increase, meaning economic activity will rise fairly rapidly over the next couple of months. Generally speaking, this would be bad news for bonds. However, since this data is considered only moderately important, its results need to vary by a wide margin from forecasts for it to affect mortgage rates.

Also tomorrow, the Labor Department will give us last week’s unemployment figures. They are expected to announce that 442,000 new claims for unemployment benefits were filed last week. This would be an increase from the previous week and considered good news for the bond market. However, since this is only a week’s worth of new claims data, its impact on tomorrow’s mortgage rates will likely be minimal. The larger the number of new claims filed, the better the news for the bond market and rates.

FLOAT or  LOCK

If I was closing on a Home Mortgage in the next 0 to 15 Days – FLOAT

If I was closing on a Home Mortgage in the next 15 to 30 Days – FLOAT

If I was closing on a Home Mortgage in the next 30 to 60 Days – FLOAT

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

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 Home Buyer?
  • 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

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