Let’s get ready to refi.



“Let’s get ready to REEEEeeeeeeeeeeefffffffiiiiii.”

Despite the US Treasury continuing to purchase billions of dollars each week in to mortgage backed securities, mortgage rates have moved sideways (or gotten slightly worse) over the past six or seven trading days (until today, keep reading).   And while most of the media and a few congressmen have been speculating about rates in the low 4’s, mortgage rates have not been able to push that low. 

The reason interest rates have not moved lower has to do with the actual mortgage securities being purchased — the government funds being used to purchase mortgage backed securities are actually buying higher rate mortgage assets (in the 6% range), mortgages that will likely be paid off through refinancing — which will allow the Feds to get some of those funds back in the short term.

Today’s successful passing of the new Economic Stimulus Bill (while not necessarily providing for lower mortgage rates yet), have allowed for some stability in the mbs market, and mortgage rates — at least as of 4:40 PM on Tuesday, February 10th, are headed in the right direction — which means lower mortgage rates should be right around the corner (either by the end of the day or tomorrow, should this afternoon’s gains continue). 

Over the past two weeks, I have been advising my clients and new leads to wait and see what happens as the markets digest the Economic Stimulus Plan and what that means for the future of mortgage rates, the financial system, banks, etc.  But my advice has always been that if it makes sense to refinance your mortgage at today’s rate, then you should move forward.  As the combination of these two factors intersect (mortgage rates dip down today or tomorrow AND the current rate would make it advantageous for you to refinance based on closing costs, etc.), then I say . . .

Let’s get ready to refi. 


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 http://www.hillsidelending.com.

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