November 9, 2012
Mortgage rates were mixed today, with some lenders in slightly better shape and others slightly higher in cost. Any lenders who were in better territory were afforded the opportunity by market improvements yesterday afternoon and earlier this morning. The remainder of the trading session has been fairly negative for mortgages with several lenders releasing negatively revised rate-sheets. Best Execution remains in between 3.375% and 3.25% for 30yr Fixed, Conventional Loans.
(Read More:What is A Best-Execution Mortgage Rate?)
There was little by way of data or events to inspire market movements today. Although there were several economic reports this morning, they didn't have much impact as markets stayed reasonably tuned in for an afternoon speech from Obama. The president spoke about the Fiscal Cliff, but didn't bring any new information to light other than the fact that he will meet with congressional leaders on the topic and hold a press conference on Wednesday. Bond markets were defensive until the anticipated speech and quickly stabilized thereafter.
Loan Originator Perspectives
"Rates are a tad worse than yesterday. Good thing is that processing times are improving so longer duration locks may not be the norm soon. I still favor locking since anything can happen." -Mike Owens, Partner, Horizon Financial, Inc.
"Market is giving back some of the last few days' gains, but we're still near lows for last several weeks. Attention shifting from election to fiscal cliff, and if there's no resolution the economy will suffer. Ironically, that will be good for rates, even if bad for the country otherwise. Capital markets closed Monday for Veterans Day. Thanks to all those who have and are serving, including my son, Lance Corporal Nathan Rood, USMC." -Ted Rood, Senior Originator, Wintrust Mortgage.
"This week was a good lesson for fence-sitters, aka rate shoppers who can't make a decision because they're holding for lower record lows. We began the week with rates spiking on a pre-election MBS selloff. Then rates fell just as quickly for two days on a post-election stock selloff and MBS rally. And today rates are again creeping up. This trend will continue as the Fiscal Cliff debate progresses. Which means you have to grab the lows whenever they appear. Here's how you do this: You must work with your lender to do three things: (1) set rate targets you won't go above, (2) completely pre-approve your loan using all income, asset, and property information, and (3) lock the rates when MBS markets rally and rates dip. Steps 1 and 2 are the critical parts of this process, because locking blindly when rates dip, then figuring out the loan after almost always leads to problems (with a loan approval factor that wasn't pre-screened, or with a rate lock expiring before the loan closes)." -Julian Hebron, Branch Manager, Loan Agent, RPM Mortgage.
"Rates remain stable. Don't forget to thank a Vet!!" -Bob Van Gilder (BVG) Finance One Mortgage.
Today's Best-Execution Rates
- 30YR FIXED -3.375%, 3.25% creepin'
- 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).