Archive for the ‘Mortgages Rates’ tag
Use A Boy Scout’s Approach When Shopping For Mortgage Rates
If the changing mortgage guidelines don’t bedevil you, changing mortgage rates will.
It’s getting even tougher to shop for low mortgages rate because rates refuse to stay in any one place for very long. The pie chart above puts it in perspective.
The data is astounding — especially against the rate-change numbers from earlier this year. It appears that mortgage rates are getting more volatile as the year goes on.
- For the 2 months ending May 19, 2008, rates changed on 68 percent of the days
- For the 2 months ending June 20, 2008, rates changed on 73 percent of the days
Today, rates change mid-day 82 percent of the time.
When you’re shopping for a home loan, remember that Wall Street often sets the rates — not the loan officer. Your best protection from mortgage rate volatility, therefore, is to saddle up with a pro that understands how Wall Street works, and then be prepared to lock your mortgage rate as soon as possible.
This last step is critical.
As an example, think back 6 months. On January 23, 2008, 30-year fixed mortgage rates dipped to 5.125% and stayed there for fewer than 3 hours. The 30 days that followed was a complete unravel job.
Shoppers that were prepared when rates dipped in January now have very mortgage rates. Those unprepared, however, missed the boat.
Volatility comes from economic uncertainty and that should continue at least through the rest of the year and probably deep into 2009. The best protection from it is simple — make like a boy scout.
Bankrate.com Mortgage Trend Index (July 10, 2008)
I am a regular participant in the Bankrate.com Mortgage Rate Trend survey and this week’s survey is now available.
As a reminder:
- The survey is for conforming loans only.
- I welcome emails from readers about purchase or refinance plans.
- I twitter market updates a few times daily. Follow me, if you want.
Anyway, on to the group’s predictions for the next 30 days:
- 31% of participants predict rates will increase
- 46% of participants predict rates will decrease
- 23% of participants predict rates will remain unchanged
I am predicting that rates will decrease over the next 30 days, but that doesn’t mean you should necessarily follow my advice when choosing whether to lock a rate, or float it. My advice may not be appropriate for your individual situation.
From the Bankrate.com survey:
"When the Federal Reserve implies a guarantee of mortgage-backed bonds, interest rates are sure to fall."
My expectations for mortgages rates right now are an extension of a post earlier this week, which then turned into a brief radio interview.
I’ve been using Twitter to communicate the mid-day market shifts to clients. It’s simple to set up and completely non-intrusive. You’re welcome to follow me if you’d like the updates, too.
Mortgages Rates, Loan Applications Remain Mostly in Doldrums
Long term mortgage interest rates as reported by
Freddie Mac in its Primary Mortgage Market Survey were virtually
unchanged during the week which ended April 17. However, long term rates
as reported by the Mortgage Bankers Association in their Weekly Mortgage
Applications Survey for the week ended April 18 underwent
significant upward movement.