TNX was down 3.77% today, yet the rates between 10:00 and 4:00 barely moved (par didn't move at all).  Is this normal?  Any chance the move will be factored in tomorrow?  Is it obvious I have no idea what I'm talking about? ;-)

BTW, I have to lock tomorrow, so I'm hoping for the best!

Hope floats, but vigilence wins.

JV, lenders started coughing up better rates during the afternoon. If you have to lock tomorrow you should be happy. We should have the best rates that we've seen for several weeks.

Bob V-G: I locked 3 today so I took one for the team. Enjoy the rally in the war room. I'm going fishin' on the Chesapeake and forgetting about the mortgage world for a day.

So it's possible that the rates will go down based on today's move?  Or something else?  Or not at all?  Or is it not as responsive to the Treasury as I've been led to believe?

Bob Hill:

Bob V-G: I locked 3 today so I took one for the team. Enjoy the rally in the war room. I'm going fishin' on the Chesapeake and forgetting about the mortgage world for a day.

Thanks Bob. Your support will be duly noted!!  Stripers?

JV- you should be okay, if not better than today. (Friday's do have a habit of biting us in the butt though)

JV---you should be okay.

JV, rates did go down based on todays move. Not all of todays gains in the MBS market are reflected on ratesheets though. Many are hoping that more of the gains will be passed along tomorrow. However, there is always a risk that we lose some of todays gains during the trading session tomorrow.

Don't focus solely on treasuries. Mortgage rates are determined in the mortgage backed security market. Sometimes they move in tandem with treasuries and other times they can be quite disconnected. Read the MBS Commentary blog for a better understanding on a daily basis.

No matter which way you slice it, today was a GREAT day in the mortgage backed security market.

Bob V-G:

Hope floats, but vigilence wins.

Well, to be fair, I've been reading these forums for about a month now.  I've been staying (relatively) on top of things.  Today has been the first day that I've felt comfortable locking.  Tomorrow is the last day I CAN lock before closing, so I HOPE I didn't make a bad decision!

You "have to" lock tomorrow---because why?

JayVee7777:

So it's possible that the rates will go down based on today's move?  Or something else?  Or not at all?  Or is it not as responsive to the Treasury as I've been led to believe?

The 10 year treasury is a competing fixed income product that has less risk than do MBSs.  They tend to move togther but not always to the same degree.  There are many other factors that affect rates: volume of locked loans, lender turn times, global political events, etc. 

The drop in yield should help, but anything is possible.  Likely we will see better rates tomorrow.

Bob V-G:

You "have to" lock tomorrow---because why?

Because I'm closing next week.  Today's my last day.  I'm thinking it will be a good one!

Meh, screw it... I just pulled the trigger.  5.25% on a 5/1 ARM with a 1/4 point and no origination.  I've got to be out of the office a lot today, and don't want to be constantly worried about missing something.

Good call?

5.25% on a 5/1 with .25% origination---- not that great. If it's a refinance at 80% or below and a FICO of 720+----should be in the 4.75% range on  conforming this morning.

Don't know your parameters however.   Good Luck!

It's a new purchase.  Does that make a difference?  Loan value of $110K, 20% down, conventional, FICO of 750

Why a 5/1 ARM with 30-year fixed rates so low? Wells Fargo has 5.375 (for now) 30-year fixed with no origination fee right now.

Unless you are a flipper, I don't understand why someone would lock in an ARM in 2009.

Moving out of state (CA to IN) to go to school.  Company pays for school, then I have to move back to CA when I'm done.  Going to be there less than five years, don't want to keep a house 2000 miles away...  How does a 5/1 NOT make sense?

There are lots of situations where an ARM makes sense.  Why pay the premium for a 30 year loan if you aren't going to be in it long term?

"How does a 5/1 NOT make sense?"

When you pay more for it than you would have for a 30-year 5.375 with no origination fee.

I agree and in the case of the OP, where he is certain he will be out within 5 years, it makes total sense to go with an ARM if it results in lower fees and better rate.

But unless there is a guarantee of moving within 5 years I don't see the point. Hasn't the past couple of years proven that philosophy true?

How do you know what I would have paid?  You're assuming an awful lot.  And being pretty rude about it too.

30-yr fixed for me are 5.875 with 0 pts.  I chose my lender because of the low closing costs.  Even paying a 1/4 point, it's going to be less than $2K.  So I'm willing to pay a slightly higher interest rate, given the fact that I'll be there less than 5 years.

5.25%---not great. 110,000- 80%- 750 Fico---Condo? yes---then rate okay!