November 21, 2012
Mortgage rates were all over the board today with some lenders improving noticeably and others pricing significantly weaker versus yesterday's marks. Much of this stratification has to do with late weakness on Tuesday which prompted many lenders to release negatively revised rate sheets near the end of the day. Perhaps equally important is the fact that lender pricing strategies can simply vary on days leading up to holiday closures. The net effect of the inconsistent movement turned out to leave rates relatively unchanged from yesterday's at most lenders (some big exceptions here though). Closing costs may have moved slightly in either direction, but Best-Execution for 30yr Fixed Conventional Loans remained at 3.375%.
As for today's events and their impact on interest rates, there's precious little to discuss. Even the movement in the underlying market is seen as being merely an extension of the prevailing trend. While this trend has been mostly higher this week, the overall trading range in MBS has been narrow enough to preclude big swings in mortgage rates. MBS are the Mortgage-Backed-Securities that most directly influence rates.
Reminder: While all mortgage lenders will be closed on Thursday for the Thanksgiving Holiday, some will also remain closed on Friday. If you're considering locking a loan this week, you should check with your lender to determine whether or not they will be accepting locks on Friday.
(Read More:What is A Best-Execution Mortgage Rate?)
Loan Originator Perspectives
"I don't have any specific guidance regarding locking or not today, but I definitely have a strong opinion, regarding locking on loans 30-45 days out....Lock 'em. Over the last 3 years, we have seen a historic run to continually lower rates, but over the previous 2 Decembers we have seen significant rate worsening to end the year. The last 3 years have been unprecedented, but this is our 3rd December during this time...I would be very protective against seeing this again." -Brent Borcherding, Capital M Lending.
Today's Best-Execution Rates
- 30YR FIXED -3.375%
- FHA/VA - 3.25% (varies more between lenders than conventional 30yr Fixed)
- 15 YEAR FIXED - 2.875% - 2.75%
- 5 YEAR ARMS - 2.625-3.25% depending on the lender
Ongoing Lock/Float Considerations
- Rates and costs continue to operate near all time best levels
- Rates could easily move higher or lower, but given the nearness to all time lows, there's generally more risk than reward regarding floating
- This will always be the case when rates operate near all-time levels, and as 2011 showed us, it doesn't always mean they're done improving.
- (As always, please keep in mind that our talk of Best-Execution always pertains to a completely ideal scenario. There can be all sorts of reasons that your quoted rate would not be the same as our average rates, and in those cases, assuming you're following along on a day to day basis, simply use the Best-Ex levels we quote as a baseline to track potential movement in your quoted rate).