Mortgage rates DOWN, then UP in a hurry.

by

Wednesday of this week, was quite possibly the most bazaar day in my 10 year mortgage career.  First, following the Fed’s surprise 0.75% rate cut (which should have caused mortgage rates to go up), mortgage rates actually dipped to their lowest levels in 2.5 years — reaching 5.0% and 5.125% for a 30 year fixed, depending on the loan size, credit score etc.  15 year rates dipped as low as 4.75%.  The anticipated jump in mortgage rates (that usually follows a Fed cut) was a day delayed . . . and Wednesday saw mortgage rates starting the day in the low 5’s, and as the stock market came back to life early in the afternoon, the mortgage market took a dive, and mortgage rates shot up 0.375% to 0.5% by the end of the day.  Investors (wholesale mortgage investors) changed their rate-sheets four and five times from noon until the end of the day, and my email inbox was filled with email notices, “ATTENTION, re-price for the worse, previous rate-sheet is no longer valid.” 

A lot of consumers missed out on the lowest rates (Wednesday morning), because they were either “thinking about things,” crunching the numbers to see what might make sense, they couldn’t get in touch with their mortgage broker, or were trying to get competing bids and good faith estimates to make sure they were “getting the best deal.”  Sadly, in an effort of good-consumerism and in an attempt to save a $100 or so in closing costs, some people missed out.

So here is my advice.  Find out WHEN you should refinance.  Spend 15 or 20 minutes on the phone with your favorite mortgage broker (for my readers in Georgia, I would narcissistically assume that would be ME), and figure out your target refi rate.  At what rate does it make sense for you to refinance — 5.25%, 5.125%, 4.75%??  Once you determine what that target rate is, now you are ready to refinance . . . maybe not Monday, or Tuesday . . . but rates may dip down again sooner than you think. 

And I hope — for me and you both — that we will see those lows again.   I leave you with this . . .

Jeffrey Pinkerton is a Mortgage Consultant and President of Hillside Lending, LLC and writer for “the Mortgage Blog.”  Hillside Lending seeks to provide mortgage brokerage services with the highest standards of service, care, honesty, integrity and value; concentrating on owner-occupied, residential financing.  For more information about available programs and interest rates, please visit www.hillsidelending.com.

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