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.
With no economic reports out today, stocks will be driving the bus for bonds and mortgages today.
Technically speaking - the FNMA 5.5% 30 year bond really hit the 100 day moving average with a resounding thud. It tried twice to break through this level of resistance. Unless there is a major downturn in the stock market today, look for bonds to drift down a bit.
This is a great opportunity 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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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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I had a client ask about that this week. Hes buying new construction that will not be finished until September, One mortgage guy said he can give a max 120 lock the other said 90. So my buyers question was does he have to keep paying to relock up until he closes?
I am going to make the following assumptions - Your buyer is not getting his loan through the construction company and he is able to put 15% to 20% down. Since this will entitle him to some of the better rates find out what the maximum interest rate he can afford.
Why? 120 days is the maximum lock that is possible without having to pay a bunch in points. September is 6 months away. Have him float until either the max rate is reached (and then see what the state of the market is) or he has gotten into the 120 day range and look at the situation again.
This saves him from having to relock every 120 or 90 days thus saving him points.
Matthew, I noticed rates dropped during the day yesterday to about 6.0. I'm guessing that short term you are expecting them to creep back up? No matter how you slice and dice it rates are very good.
Diane - I actually expect them to remain steady until early next week when more reports come out showing a slowing economy. Rates should improve next week. (Though now that I have said that ... )
Matthew,
I guess in your business bad news is good news and good news is bad news as far as interest rates go?
Mike - yup. Kinda half back *** wards.