Should I float? Should I lock? - Daily Update for Wednesday, February 6, 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.

Yesterday what should have been slow news turned into a big deal. The ISM Index - an index showing the relative strength of the service industry - came in much lower than expected. This index which has been showing a steady reading above 50 came in at a lowly 41. (Anything below 50 is considered to be a signal the economy is in a retraction). Because of this, the stock market took a severe beating falling over 300 points & bonds soaked up the difference by rising in price, hence lowering rates by a fair bit.

Technically speaking - the FNMA 5.5% 30 year bond is approaching the 2 1/2 year resistance mark. Since bonds are in neither an overbought nor oversold stage, potential improvements could be realized.

Since a rebound in the stock market is expected, today would be a good day to grab the good rates that came out and

Lock!

To learn why one should Float or Lock -

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