San Diego mortgage rates dropped, then rose to their original level, last week. I've been advising mortgage borrowers to lock all rates at application, regardless of closing date. Did I miss an opportunity to improve clients' rates? I don't think so. My approach is more one of limiting losses than improving gains and last week, I thought there was a threat of higher mortgage rates in San Diego; I still do.
Inflation data is released Wednesday and Unemployment data is due out Thursday. These two figures could be the tempest in the teapot and really affect mortgage rates. We just think there is too much risk to be floating (holding out for a better rate). If markets overreact (and they usually do) we'll change that recommendation but for now, we think it's prudent to lock your mortgage rates.
Currently, the 5/1 ARM offers the best value at 4.875% wholesale rate. The 30 year fixed rate loan is 5.875% wholesale rate. While there is risk in losing the rate after 5 years, most borrowers don't hold a mortgage that long. If you are thinking of moving in the next few years, it would be well to examine the benefits of refinancing your home loan to a low 5/1 ARM rate.
Contact me at (858)-777-9751 with more questions.
