Current mortgage rate trends have improved slightly today.
Recommendation: If closing in 7 days-lock. 8-15 days-float. 15 - 30 days- float. 30+ days - float.
The reason: Mortgage rates rise and drop based on the purchase and sale of mortgages on the bond market. You didn't think the bank lent you their money and wait 30 years for you to pay it back did you?
That's okay, most folks think they do (including me until I got into this business) Banks sell the loan to other banks or investors for a profit, replenish their cash and lend it to the next person buying a home. That bank will often sell it on the bond market to a private investor, hedge fund, mutual fund or pension fund.
When investors buy these mortgages to put in their portfolio of investments the demand causes mortgage rates to drop. When investors believe they can make more money buying stocks and sell their mortgage investments mortgage rates go up. Current mortgage rate trends improved only slightly because there isn't much buying or selling of mortgage bonds. No movement, no wild swings...today.
Current mortgage rate trends are also better today due to the ongoing fear about debt in Greece, Portugal, Ireland and Spain makes mortgage bonds look like a safer investment versus stocks. Portugal followed Greece and Ireland in seeking emergency loans from the International Monetary Fund and European Union.
Now is a great time to buy a home or refinance an existing mortgage. Once Americans catch drift that the economy is improving expect mortgage rate trends to deteriorate as mortgage rates begin their climb.
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