California Mortgage Rate Update for the Week of 03/27/12:
This week's update is coming to you a day late, but hopefully not a dollar short. I'm getting a delayed start, but given the positive changes to mortgage rates so far this week, that's not a bad thing. Today we saw a nice run up in mortgage-backed security (MBS) prices and this has tempered the rate increases that have hungover from last week. We are slowly making back ground -- an encouraging sign.
Fed Chairman Ben Bernanke's comments yesterday (Monday) kept the door open, at least in many investor's minds, to another QE move and the stock market rallied off of the news. Bonds liked the news as well, for the obvious reason that MBS would be purchased with any additional monetary stimulus. Today, more carry through with the downer of a Case-Shiller housing number and a fairly strong Treasury auction, again reinforcing the possibility of more Fed support. All summed up, this is favorable for mortgage rates.
Economic highlights for the week: For the balance of the week, we continue with Treasury auctions, but have to keep an eye on the jobless claims on Thursday, which could be a market mover. I hate to be a wet blanket here, but I echo those who feel that perhaps the recent trend in job creation might slow. Further, I think the stock market is due for a pullback. So these two, plus the recent rebound makes me optimistic about rates in the near term. I expect better.
Lock advice: I am switching to a FLOAT position unless you have a close of escrow in the near term and just cannot tolerate market fluctuation. If you're happy with your current rate, no point in not locking. Also, if you're refinancing but pressed for time to close, consider a "no cost" refinance option. You'll take a slightly higher rate now, but if things go lower in the future, you can ratchet down again and the move will pay you back. If things only go higher from here, well, you've locked in most of your gains and your rate will still be excellent.
Remember, we now offer the HARP2.0 refinancing options for those who are underwater on their homes. Contact me with any scenarios.
For specific pricing on your scenario, or to get pre-approved without obligation for any of these loan products below, you can:
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