MBS MORNING: Nominal Retracement

SHOULD I USE THIS OPPORTUNITY TO LOCK OR DOES ANYONE ANTICIPATE EVEN BETTER RATES AS THE GOVT. BUYS MBS. WHEN IS THE BUYING SLATED TO START?

In this market, I don't anticipate anything. I don't see any reason to lock right now though. It seems like its trading flat, so if you have no immediate need and you missed any pricing on the highs from this morning there's no reason to lock right now. I got lucky and locked in a deal this morning on the spike, and they repriced just after getting it in. To the author: Love the blog, and the new site looks nice. I've been reading your blog for a while now, and really appreciate the information. (and the photo shopped pictures)

I'd agree with Brian on this one. The only thing that's predictable about this market is that it's like riding a roller coaster when you can't see what's around the next curve. The answer on whether to float or lock depends on your risk tolerance. It's incredible to see a 1-percentage-point swing in a matter of weeks. Personally, I want to get off this crazy ride for now. If we see something in the 4s down the road, refinancing is always an option. Great blog by the way - you've helped save me a ton of money!

my current 30 yr fixed is at 6.25 and i can change my rate at any time for a $1k fee with my credit union. should i jump now or float on? what do u experts think?

I JUST LOCKED IN A 30 YR. FIXED @ 5.5, NO POINTS, NO PREPAYMENT PENALTY, NO ESCROW. WHAT DO YOU THINK?

Hello m r. Forecasting is essentially impossible lately. Markets don't respond to the usual market data, and new things such as bailouts, collapses, and the incoming president are wreaking all kinds of havoc on rates. We did break an important level of resistance, so I would suppose lower rates are possible, but its hard to bet on it. Rates were about where they are at now back when Freddie and Fannie got bought up. Since then rates went up, and seemed to bounce between 6 - 6.5%. To me, that says we may be seeing a low point, and getting that lower rate wouldn't be a bad idea. It may be worth it to call your credit union and see what they could lower your rate to, and how much that will save you. If you have a $200k loan, and they can drop it to 5.5% you'll be saving about $96 per month. You'll make up that $1k cost in less than a year. If you are allowed to do that rate reduction more than once, I really don't see a reason not to go for it. If rates continue to drop, you can just do it again. Look at it as an investment over time though. You are investing $1k now ... how long will it take for that investment to pay off and start earning money?

Andrew - Depending on your scenario (i.e. credit score, loan amount, equity level, etc.) I have seen rates as low as 5.375% today and as high as 5.625%, for 30 year fixed rate loans. m r - if you can make up that $1000 fee in less than a year via your payment savings at the new rate, then it is definitely worth it.

Thats great, Andrew. Thats what I got this morning, and I can still get it with some of my investors -- but just barley.