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3/29/2013

Mortgage Rates Steady

American Flag in Monarch Beach, California
 
Cheeta on termite mound watching the market?

Pride of Lions
 
  • Mortgage rates push slightly higher today. The trading session for bond markets including Mortgage backed securities, closed early on Thursday in honor of today’s Good Friday holiday. Although I’m Catholic, I wonder how a religious holiday stops business nationwide. Today fundings and wires are closed early, despite the fact that it is end of the month which is typically the busiest day for home loan closings. Assume all bond traders have left the building and are relaxing in their second home in the Hamptons. I have three loans to close this morning and hope their dreams of moving into houses in Dana Point, Newport Coast and Newport Beach do happen over the Easter weekend.
  • Though there is political bad news in play, none of the worries about run on banks in Cyprus bailout seem to shake and tremble the ten year bond traders. Trading levels rocked back and forth all day yesterday. Best executions on interest rates (with one point) for 30yr Fixed loans hover at 3.625% with the minor weakness being seen in the form of moderately higher borrowing costs. Normally before a three day weekend traders would raise rates, increase margins and protect the igloo to be able to get out of town safely for the holiday. Still there are worries about the economics in Italy and the EU.  A lion or a cheeta lurking on the savannah?
 
  • Mortgage rates remain low. More money and lenders are jumping into Jumbo and Super Jumbo ARMS with interest only payments and even qualify without taxes for the self -employed (of course priced for that risk)
  • CONFORMING LOAN RATES THIS MORNING:
  • Rates change all the time, this is not an offer to lend you money
  • 30YR FIXED - 3.75% (APR 3.811), 3.625 % (APR 3.789) coming back into view
  • FHA/VA - 3.375 (APR 3.499)
  • 15 YEAR FIXED - 3.00% (APR 3.129) coming back into view.
  • 5 YEAR ARMS - 2.625 (APR 2.713)
  • Of course there are pricing adds for: FICO, property type, time period for lock, loan to value, use, dollar amount, and the proverbial kitchen sink.


Lock/Float Worries for April and May 2013

  • Rates are moderately higher but consistently since hitting their all-time lows in September and October 2012.

Other factors that prevent mortgage loans from sliding back to lower numbers are worldwide concerns about the EU bailouts and still high unemployment. We aren’t out of the woods with those ugly monkeys Toto, not yet.

Though some would wish we were Japanese mortgage rates of recent history (less than 2%) with that comes great sacrifice for the whole. California appears to be miraculously recovering in coastal areas, with values rising. Still there are homeless families on the corner near my house in Monarch Beach with a cardboard sign about their financial troubles. We live in such a beautiful community it is difficult to think about those who are facing hardships this Easter.

I predict we will see another rate dip around Halloween 2013, perhaps triggered by some newly promoted news. It seems the story of the day is interpreted into code that traders take or leave depending on who will profit. I don’t mean to sound jaded.

What does that mean for the individual purchasing a home in Orange County California? Rates are still great, you may not hit the perfect day in the perfect moment but an eighth or a sixteenth isn’t going to break the debt to income ratio and fail your plans. My advice, don’t pay a fortune for your loan, just in case we see a dip again in October. Steady course, keep your credit on track and budget...

Keeping you in my thoughts and prayers for a Happy Easter, a joyful Passover and hopefully low tide will bring good fortune to you.

Laguna Beach Surf California, low tide
HUD House Equal Housing Opportunity

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