Tomorrow the Bureau of Labor Statistics will release the Employment Situation Report. This is the single most influential monthly dataset shared with the market. It carries the potential to shift investment perspectives and realign outlooks.
It could be way better than expected and 30 year fixed mortgage rates could go into the 5's by the end of the day. It could be way worse than expected and rates might take reasonable steps back toward 4.25%. It could do either of those things and rates could be relatively unchanged. Or it could do either of those things and paradoxical opposite reactions could occur. The point here is that tomorrow is definitely NOT about how NFP prints compared to how economists expect it to print. It is all about how the market receives it and whether or not there are any other major news events being digested at the time (Europe is a continuing theme that comes to mind).
Would we take that reaction to be a sign of things to come in 2011? Or just temporary indigestion over positive economic data that is bound to have counterpoints come out in the near future? Ultimately, one has to decide how high rates can go before they'd no longer be able to pull the trigger on a refinance or purchase. It's very important for you to calculate just how many DOLLARS PER MONTH you'd save if a rate went from 4.5 down to 4.25. So given your loan amount, you'd then know what every .25% in rate would save you in dollars. The bigger your loan amount, the more sensitive your payment is to changing interest rates.
yesterday, we said it is now up to NFP to either serve as the nail in the proverbial coffin or to help mortgage rates stabilize and move lower. While the door is open for some long-term/strategic optimism, the short-term/tactical strategist should favor damage-mitigation, defensiveness, and a conservative approach to locking in loan pricing. Once NFP hits tomorrow , we'll know a lot more about how things COULD go and hopefully even a bit more about how they probably will go.
The best conventional/FHA/VA 30 year fixed mortgage rates have risen to a range between 4.375% and 4.750% for well-qualified borrowers. The best conventional/FHA/VA 15 year fixed mortgage rates are in a range between 3.625% and 4.00%. Best execution on a 30-year fixed loan for a well-qualified, no LLPA borrower is 4.50%.
Important Mortgage Rate Disclaimer: Loan originators will only be able to offer these rates on agency conforming loan amounts to borrowers who are have a middle FICO score over 740 and enough equity in their home to qualify for a refinance or a large enough savings to cover their down payment and closing costs. If the terms of your loan trigger any risk-based loan level pricing adjustments (LLPAs), your rate quote will be higher. If you do not fall into the "perfect borrower" category, make sure you ask your loan originator for an explanation of the characteristics that make your loan more expensive. "No point" loan doesn't mean "no cost" loan. The best 30 year fixed conventional/FHA/VA mortgage rates still include closing costs such as: third party fees + title charges + transfer and recordation + escrows (things like upfront MIP (if required), property taxes, homeowners insurance, accrued interest)".