Here are the daily thoughts on floating or locking if you are asked by your clients.
As always - consult your favorite mortgage professional who will be able to offer the best advice for YOUR unique situation.
Little news due out this week. Bonds will be taking direction from stocks and other assorted (and sordid) news sources. Bonds appear to be following historic trends by dropping 22 bps just after opening today - just a few days after the Fed lowered the Fed Funds rate.
Technically speaking - the FNMA 5.5% 30 year bond has broken below the 10 day moving average and is moving down towards the 25 day moving average. The bond has also dropped from overbought levels.
Due to little internal information for the bond to follow, it usually follows the trend it has been in most recently. Therefore the best course of action would be to
Lock!
To learn why one should Float or Lock -
Check out Should I float? Should I lock? & Reasons to Float or Lock
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Education in the Mortgage Planning process help folk understand how to turn their "biggest debt" into their greatest asset! Have me show you how to accomplish this.
Should I float? Should I lock? - Daily Update for Friday, August 15, 2008
Should I float? Should I lock? - Daily Update for Thursday, August 14, 2008
Should I float? Should I lock? - Daily Update for Wednesday, August 13, 2008
Should I float? Should I lock? - Daily Update for Tuesday, August 12, 2008
Should I float? Should I lock? - Daily Update for Monday, August 11, 2008
Should I float? Should I lock? - Daily Update for Friday, August 8, 2008
Should I float? Should I lock? - Daily Update for Thursday, August 7, 2008
Should I float? Should I lock? - Daily Update for Wednesday, August 6, 2008
Should I float? Should I lock? - Daily Update for Tuesday, August 5, 2008
Should I float? Should I lock? - Daily Update for Monday, August 4, 2008
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Matt, do you think the interest rates are going to drop more before the election? What's your take on after the election? Just curious. Let me know what your crystal ball tells you. Deb
I saw in Kiplinger's the other day a prediction of the Fed lower the Fed Funds rate (directly the Prime) another 1/2% by summer time.
Since the Fed is "supposed" to be non political - remember Greenspan started serving under Reagan, Bush, Clinton kept him on, and then Bush Jr. - all moves the Fed is making is supposed to be best serving the economy and country. Therefore, depending on when inflation starts to pick up and the current economic crisis passes will we see short term interest rates start to rise again. (Probably not till '09)
Matt, in your opinion do you think it will be in the last quarter of 09? I do have a reason for asking...tell you later. Deb
Debra - Honestly, I don't know. The crystal ball does not see that far ahead in such fine detail. I don't think anyone knows that one (with perhaps the exception of God).