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San Diego Mortgage Rates Report: November 29, 2007

We are seeing the lowest fixed rates since October 2005.  Loan Toolbox reported, in an e-mail to me:

• Monday saw the lowest 30-year fixed interest rate in over two years. However, each time this interest rate reached previous low points, both last year and earlier this year, it began increasing and didn't stop, climbing over 0.50% in the months that followed!
  
  
• Fannie Mae and Freddie Mac tightened guidelines, announcing new Loan-Level Price Adjustments. In the first quarter of 2008, most borrowers who have good credit, but have FICO scores below 680, will now be forced either to pay more points at closing or incur a higher interest rate.

Borrowers could be forced to pay as much as 2.00% in points or an interest rate; that's 1.00% higher than the going rate.

On a $400,000 home loan, a borrower could have to pay up to $8,000 in order to receive normal market rates! Borrowers choosing the higher interest rate, under the worse case scenario, would stand to lose over $12,000 in just the first three years of the loan.

Choosing to wait could cost you money both in the form of higher market rates and points. This could well be the greatest holiday present you could treat yourself to this year.

Call me today for a FREE loan evaluation to determine what we can do to help you improve your financial situation.

San Diego Mortgage Rates Report: November 26, 2007

Locking mortgage rates at application has been my advice since our last report.  Mortgage bond prices improved last week, and today, because of continued fear of defaults in the sub-prime loan market.

While my advice appears to be incorrect, I was mostly worried about inflationary data showing up in this week's figures.  Consumer Confidence and Existing Home Sales are due out in the next two days and the granddaddy of all economic reports, Gross Domestic Product, is due out on Thursday.

I'm not retreating from my earlier recommendation to lock your mortgage rate at application.  Fixed mortgage rates below 6% can be locked in the early part of this week.  While the sub-prime defaults are causing agida for Wall Street, it would appear unlikely that the Fed will cut even farther than the .25% that the interest rate market expects.

If I'm wrong on Thursday, and GDP comes in dramatically lower than expected, I'll immediately change my posture to float mortgage rates.  However, the risk of higher mortgage rates outweighs the opportunity for getting "just a little bit better" on the rate.  If you can get a rate below 6% (and you can), lock it in.

Rates we offer today:

PROGRAM                RATE                APR

3/1 ARM                 5.525%        5.613%
5/1 ARM                 5.625%        5.887%
30 Year Fix            5.875%        6.124%

Rates as of 11-26-2007 and are subject to qualification and  market fluctuation.

Equal Opportunity Lender

San Diego Mortgage Rates Report: November 14, 2007

Goldman Sachs reiterated, for the eight time yesterday, that its exposure to the sub-prime mortgage crisis was limited; Wall Street responded by buying stocks:

Goldman Sachs Chief Executive Officer Lloyd Blankfein told a New York conference yesterday that the largest U.S. securities firm by market value doesn't plan ``significant'' writedowns from subprime-mortgage securities. Bank of America said its losses will be restricted to $3 billion next quarter and UBS AG analyst Glenn Schorr said the potential for losses at Lehman Brothers Holdings Inc. is ``negligible.''

Bear Stearns followed up with another positive forecast about its sub-prime loss this morning:

U.S. stocks were poised to rally for a second day after Bear Stearns Cos. eased concern that credit- market losses would deepen and retail sales topped economists' forecasts.                    Bear Stearns climbed after the fifth-largest U.S. securities firm said it is regaining hedge-fund customers and it would only write down $1.2 billion from subprime assets this quarter.

What does this mean for mortgage applicants?  The positive momentum for stocks, spurred by the somewhat positive news from the financial sector, should draw money away from mortgage bonds this week.  Economic reports were somewhat flat today and are expected to be flat tomorrow.  While the majority of Wall Street believes that rates will be cut in the near future, we believe that may be priced into the market.  As money flows to stocks and away from bonds, it may cause rates to rise over the next couple of weeks.

We are changing our bias to locking loans at application.

Rates we offer today:

PROGRAM                RATE                APR

3/1 ARM                 5.625%        5.813%
5/1 ARM                5.875%        6.087%
30 Year Fix           6.125%        6.324%

Rates as of 11-14-2007 and are subject to qualification and  market fluctuation.

Equal Opportunity Lender

San Diego Mortgage Rates Report: November 9, 2007- Who's Afraid of the Big Bad Reds?

San Diego mortgage rates were pretty much unchanged this week, exactly as we expected them to be. 

The Chinese said that our dollar was akin to a Latin American country's currency which gave us a minor scare in the mortgage-backed securities markets.  We responded by saying that their toys are more dangerous than lead-based paint chips.

 What does China have to do with San Diego mortgage rates?

READ THE REST OF THE STORY

San Diego Mortgage Rates Report: November 1, 2007

The Fed cut yesterday and mortgage rates in San Diego went up.

GDP growth is the best it's been in 18 months.  Inflation,excluding the costs of food and a gallon of gas, is tame.  This suggests that the economy is growing regardless of what we are feeling with this housing slumpin San Diego.

Wall Street still thinks rates will be cut further.  Confused?

A cheeseburger happy meal at Mc Donalds and a gallon of gas at Chevron are almost twice as expensive as they were in 2003.  Monthly housing expenses (including the higher mortgage payments) are some 50% higher than they were in 2003.  That may just be a measure of the staple goods but that is real money coming out of consumers' pockets- money that could be used to purchase cars, computers, etc.  Shouldn't the Federal Reserve be raising rates instead of cutting them?

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