Financial markets are taking pause today in honor of Good Friday. It was another dramatic week with Ben Bernanke playing John Wayne.
Last weekend, Bernanke brokered a deal that handed Bear Stearns over to Jamie Dimon and JP Morgan Chase.
Last week, a share of Bear Stearns traded for thrice the price of the monthly HomeGain AgentEvaluator subscription, this week, it trades around the price of a Starbucks cup of coffee.
Fannie Mae and Freddie Mac agreed to buy a lot of mortgages, $200 billion worth to be precise. This buoyed up the mortgage bonds market and had a positive effect on most mortgage rates.
Let’s lock those rates, now.
I don’t see a whole lot more reward on the horizon and the risk of higher rates will increase next week.
ARM rates are out of whack, again, and the fixed-rate mortgages are the best priced. Today, the wholesale rate for a 30-year fixed-rate loan is 5.625%. If you called me, you would get that 30-year fixed rate loan for 1% of the loan amount plus $499 for an APR of 5.89%.
A 15-year fixed rate mortgage can be locked for 4.875% for an APR of 5.15%. That’s about .75% less than what rates were on March 10. My advice to stay calm, in the face of panic, and float rates, panned out.
If you need specific advice, about a mortgage, contact me here.
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I am in the middle of refinancing and a couple weeks ago I locked in at an interest rate of 6.125% - this includes receiving $12,000 cash out and is with good credit - not great, but good (credit score approx 710). Our house is appraised at 183,000 and we are refinancing a total of 153,000, plus closing cost. My loan guy said that if the interest rates drop, he could switch to that lower interest rate. I am reading - like your article that the interest rates have dropped, but he says that we are locked in at a good rate. (That was as of Wednesday, March 19th, I believe)Anyway, what do you think I should do?
Mary
March 23rd, 2008 at 5:01 pm
Hello Mary,
I think you might want a second opinion. I’m happy tp provide one for you if you fax he good-faith estimate and Truth-In-Lending statement to (858)-605-4230 and call me at (858)-777-9751.
On the surface, it sounds as if you can get a better rate but loan rates are determined by more factors than you’ve provided, today
March 23rd, 2008 at 7:07 pm