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Should I float? Should I lock? - Daily Update for Tuesday, January 15, 2008

Here are the daily thoughts on floating or locking if you are asked by your clients.

As always - consult your favorite mortgage professional who will be able to offer the best advice for YOUR unique situation.

Big news came out today with Retail Sales being down .4% and the Producer Price Index down .1% . Both these numbers are considerably weaker than expected. This coupled with the continued weakness on Wall St. from the likes of Citigroup lead us to a good outlook on bonds.

Technically speaking - the FNMA 6.0% 30 year bond appears to be bumping up against resistance levels set 2 1/2 years ago. Though bonds are in an overbought position, the bad economic news that came out today with what appears to be another weak day for the stock market would suggest to

... float.

To learn why one should Float or Lock -

Check out Should I float? Should I lock? & Reasons to Float or Lock

Posted by Matthew Rosov, Certified Mortgage Planning Specialist on 01/15/2008 08:00 AM

Comments (5)

mortgage rates, education, tips, float

5 Comments on Should I float? Should I lock? - Daily Update for Tuesday, January 15, 2008

JAN

2008

I would tend to lock before the next rate cut though. it seems everytime after the cutt the long end of the bond market sell off---mike

I wish I knew what to do. Can they cut rates with inflation knocking on the door?

The next Fed meeting will be on Jan 29/30. Depending on how the inflation reports come in, conventional wisdom (i.e., all the various pundits) is expecting either a 1/4 point or a 1/2 point cut.

Although Michael is correct that a cut in rates does result in the bond market selling off and mortgage rates rising. This isn't for another two weeks. During that time, one can expect rates to improve considering the weak numbers that appear to be coming out.

Though I normally just report on what is happening on a daily basis, I would suggest that if you have a customer that won't be closing for another month, to float up till the Fed decides what to do or until good economic news comes out which will result in a sell off.

My $.02

Great words, my man....and you hit the nail on the head as to why.....great job.

Matt, we just seem to be getting a stream of negative reports from Wall Street these days.

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