February 21, 2012 at 10:54 pm 
February 17, 2012 at 8:27 am 
Mortgage Rate Update
30 yr fixed as low as 3.875% with 0 points, 15 yr fixed as low as 3.000%, all with minimal or no closing costs.
Interest rates are again at the lowest levels we have ever seen and homeowners are taking advantage of the opportunity to lower their payments. Due to poor economic conditions both here and abroad, investors are once again in a “flight to safety” and looking at Treasuries and Mortgage Backed Securities as safe investments. The FED announced on Jan 25th, 2012 that they intend to keep rates at current levels through 2014. Bond yields remain near their lows for 2011/2012 and lenders pass this along in the form of rates that are at historic lows. Please review our rates on selected programs below. Lower rates are available for borrowers willing to pay discount points.
Loan Program Max Loan Amount Interest Rate APR Points Strategy/Features
30 year fixed $417,000 3.875% 3.913% 0 points Safe, popular, lowest fixed rate payment, no interest rate risk.
20 year fixed $417,000 3.750% 3.802% 0 points Lower rate and forces you to pay off loan in 20 years.
15 year fixed $417,000 3.125% 3.191% 0 points Lower rate, save thousands in long run. Balance reduction strategy.
10/1 ARM $417,000 Call Call Call
10/1 ARM IO $417,000 Call Call Call
7/1 ARM $417,000 3.250% 3.286% 0 points Short term strategy. Lowest rate/payments.
7/1 ARM IO $417,000 3.750% 3.788% 0 points Interest Only payment.
5/1 ARM $417,000 3.000% 3.036% 0 points Short term strategy, lowest rate/payments.
5/1 ARM IO $417,000 3.625% 3.662% 0 points Interest Only payment.
"Agency Jumbo" 30 yr fixed $625,500 4.125% 4.163% 0 points Check County loan limits
"Agency Jumbo" 15 yr fixed $625,500 3.875% 3.943% 0 point Check County loan limits
FHA 30 yr fixed $417,000 3.500% 3.578% .50 points Min 3.5% down. Mandatory MI. No interest rate risk.
FHA 15 yr fixed $417,000 3.000% 3.193% 1 point Low Payments.
Min 3.5% down.
FHA 30 yr Jumbo $625,500 3.750% 3.750% 0 points Check County loan limits
Rate Trend – LOWER
Our rate sheets improved slightly overnight, unwinding a bit from yesterday’s run up perhaps. So far, the news today out of Europe has helped pricing improve, but changes to rates are minimal. Trending lower right now.
Update 1:30pm – Continued improvement. Yesterday’s losses have been regained and lenders have repriced for the better.
Rate Trend HIGHER.
Mortgage rates worsened today (meaning the cost for a given rate is a bit higher). “Good” news regarding the Greek bailout is driving bond markets in the wrong direction for mortgage rates. Effects have been minimal – so far.
2pm update – Rates are trending higher over the past few weeks. We are still at 3.999% with 0 points on the 30 yr fixed conventional/conforming program. If recent history repeats itself, this mini run up in rates will settle down and we will return to cheaper pricing. Remember, bad news here or abroad usually results in falling rates, and with the economic problems the world is still facing (not to mention Iran/Isreal/US tensions, rising oil/gas prices), it’s not unrealistic to think that rates should remain at these levels for the foreseeable future.
Bond markets and lenders are closed Monday 2/20/12 for President’s Day.
Rate trend – HIGHER.
Here’s an excerpt from last Thursday’s Mortgage News Daily:
Mortgages Rates reversed a recent trend of gradual improvement, moving higher today after a better-than-expected read on employment from this morning’s Jobless Claims report as well as news that the ECB will swap out their Greek government bonds this weekend. 30yr Fixed Conventional Best-Execution Rates continue to operate in 3.875% territory on average, and the closing costs associated with those rates had been nearing the lower end of their historical range. While 3.875% Best-Execution remains intact today, the cost associated with obtaining them is higher on average.
Thursday’s Jobless Claims report showed 348k new claims this week versus an expectation of 365k. When data indicates that the labor market is faring somewhat better-than-expected, bond markets tend to move higher in yield (and rates get worse). It’s not always a linear relationship, but is generally true, and in line with the market’s reaction to the data. But the domestic economic situation is scarcely the biggest contributor to the current interest rate environment.
Concerns over the potential fallout and/or inability to contain the European debt crisis are the key factors keeping interest rates at historically low levels. While Treasuries are the direct beneficiaries of that turmoil, MBS (the “mortgage-backed-securities” that most directly influence mortgage rates) get to come along for the ride. Today’s news that the European Central Bank (ECB) would swap out its Greek bond holdings over the weekend basically amounts to an injection of capital into Greece’s balance sheet (read more about it HERE if you’re interested). A lower debt burden for Greece helps alleviate some of the fears of the aforementioned fallout. Since those fears are keeping rates lower, when the fears lessen, rates respond by moving higher.
Call me for rate updates and product pricing. I’m available to you 24/7! Thanks.