Let’s Recap:
The 30-year fixed rate mortgage averaged 6.34%, up from 6.31% last week.
The 15-year fixed rate mortgage averaged 5.98%, up slightly from 5.97% last week.
The 1-year adjustable rate mortgage averaged 5.65%, down slightly from 5.66% last week.
Interest rates rose ever so slightly this week amidst slightly diminished liquidity concerns and increased expectations of inflation; both of these brought on by this week’s Fed Funds Rate cut.
The Fed Funds Rate:
With this week’s decision by the Federal Open Market Committee to cut the Fed Funds Rate 50 basis points (.50%), the new rate stands at 4.75%.
The next scheduled meeting is on October 31st at which point we expect the Fed to yet again cut the Fed Funds Rate by an anticipated 25 basis points (.25%) in a continuing effort to loosen up credit markets and keep economic expansion on track.
The Week Ahead:
Continued inflation concerns and dollar exchange rate will continue to heavily impact the bond market so watch for daily rate changes. At this point it is highly recommended that you float with caution but consult with your Mortgage Advisor to anticipate any reversal in strategy to lock-in your note rate.
Up ahead on the Economic Calendar we have: Home Sales, Consumer Confidence, and Durable Goods Orders. For a clearer view of the week ahead please visit www.bloomberg.com or visit Ana Connell'sThe Weak Ahead.
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Recommendation:
I would...
1. Float with caution but consult your Mortgage Advisor daily to anticipate any reversal in strategy to lock-in your note rate.
2. Double-app. your loan with different institutions.
3. Obtain a FORMAL loan approval prior to making an offer on a home as the credit landscape has changed drastically.
Jumbo Mortgage Rates:
Rates on 30-year jumbo mortgages increased 3 basis points to 7%.
Rates on 15-year jumbo mortgages increased 6 basis points to 6.75%.
A jumbo mortgage is a home loan that exceeds the loan limits set by Fannie Mae and Feddie Mac. These types of mortgages generally have a slightly higher interest rate than their smaller “conventional/conforming” counterparts.
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