The Mortgage Interest Rate Lock Advisory for August 31, 2009
Here are some of the events affecting mortgage interest rates today in Massachusetts, Maine, and New Hampshire.
What the Mortgage Backed Securities Market is Doing Today:
The price of the FNMA 30-Year 4.5% MBS coupon opened unchanged this morning from Friday's close at 100.19.
The price of the FNMA 30-Year 4.5% MBS coupon closed up 2/32 on Friday to 100.19 (as shown by the white line), and closed up 10/32 for the week. MBS is currently trading up 6/32 at 100.18 (as shown by the blue line). Remember, on mortgage backed securities (MBSs), as the price goes up, the yield comes down - and mortgage interest rates come down with it. I expect that mortgage interest rates will be the same in price this morning as compared to Friday's close, but may improve by 0.125% in price this afternoon.
News and Events That Could Affect Mortgage Interest Rates Today:
There are no economic reports or news expected to be released today. So, look for the mortgage market and mortgage interest rates to be heavily influenced by the stock markets today.
What's Happening With Mortgage Interest Rates Today:
Moderate to High Volatility. Look for the mortgage market and mortgage interest rates to be heavily influenced by the stock markets today.
Overall, I expect to see the most of the movement in mortgage interest rates on Friday as next Monday is Labor Day, so all markets will be closed then. While the mortgage backed securities market will be open all day Friday, many traders will head home early for the long weekend after Friday's data is posted. This means that trading will likely be thin Friday afternoon even though the markets will still be open. That could, in turn, lead to additional volatility in the mortgage market and mortgage interest rates - so be careful, keep an eye on the markets this week, and stay in contact with your mortgage professional if you're still floating an interest rate.
My Mortgage Interest Rate Lock Advice for Today:
If I were considering financing/refinancing a home, I would...
- Lock if my closing was taking place within the next 7 days
- Lock if my closing was taking place between 8 and 30 days
- Float if my closing was taking place between 31 and 45 days
- Float if my closing was taking place between 46 and 60 days
This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of any or all other borrowers.
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