Record Low Rates and Future Guidance

CURRENT MARKET*: The BestExecution 30-year fixed mortgage rate is between 4.000% and 4.250%. Several lenders are willing to offer 4.000%, 4.250% is widely available, and we've actually seen strong 3.875% quotes too. On FHA/VA 30 year fixed BestExecutionis 4.00%. Some lenders are willing to go as low as 3.75% without extra closing costs. 15 year fixed conventional loans are best priced at 3.625% but we're seeing aggressive quotes as low as 3.375%. Five year ARMs are still best priced at 3.25. ARMs seem to have bottomed out.

While many lenders have greatly improved their consumer rate quotes over the past few days, we must point out an increased amount of variation in what individual lenders are quoting as theirBestExecution rates. This is a factor of price volatility in the secondary mortgage market. Unfortunately when volatility picks up in the secondary mortgage market, the cost of doing business gets more expensive for lenders (hedging costs go up). Those added costs are usually passed down to consumers via extra margin in rate sheets. These costs are unavoidable. The best thing for mortgage rates right now is stability.

GUIDANCE: If you missed the boat on record low mortgage rates last November/October, the opportunity is once again out there for the taking. We think you should jump on it as soon as possible. The risks involved in floating have greatly expanded to include lenders taking it upon themselves to negatively adjust rate sheets (to slow loan production).