Let‚Äôs lock all mortgages rates at application, regardless of when its closing. I think this is about as good as it gets for a while. I still see 30 year fixed rates a tad under 6% (5.875%) but the good economic data, released today, could drive national mortgage rates up next week.
I recommend a 7/1 ARM today. Rates offered for a 7/1 ARM, for loans under $417,000, are OVER a half a percentage point less than the 30 year fixed (5.25%). Most borrowers will feel comfortable with a seven year time frame. This means that 5.25% rate is locked in for 7 years- that‚Äôs until 2015.
(All loans offered to the consumer at the wholesale or ‚Äúpar‚ÄĚ rate. We are paid 1% by the consumer.)
To give you an idea of how long 7 years is, Disneyland‚Äôs California Adventure opened in early 2001. You probably thought it was around forever.
The bond traders won‚Äôt be merciful next week unless recessionary data are overwhelming. Jump on these low rates now.