Should I float? Should I lock? - Daily Update for Monday, April 21, 2008

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.

Regularly scheduled market reports are not due out again until Wednesday.  Bonds will be taking direction from other sources.   Friday proved this out.  The day started with a significant increase in the stock market and predicable response from the bonds of opening low and staying low most of the day.  The last few hours of Friday resulted in bonds improving significantly.  This appears to have been precipitated because the LIBOR (London InterBank Offer Rate) had been understated. 

This increase and restating of the LIBOR caused a flight into mortgage backed securities resulting in the improvement.   

Technically speaking - the FNMA 5.5% 30 year bond bounced back up to the 50 day moving average on Friday.  This morning the bond is appearing to be bouncing back down off the 50 day moving average.  Unless more news comes out to support an increase, look for rates to continue to get worse throughout the day.

Take advantage of what happened Friday and

     Lock your interest rate.

                          Check out Should I float? Should I lock? & Reasons to Float or Lock