The mainstream media is not a great place to get information about mortgage rates; the information they have is usually outdated. I mentioned this when I said that the LA Times mortgage rates table was a 45 rpm record in an iPod world. Further evidence from the Dayton Business Journal:
Mortgage rates remain low as the Federal Reserve continues to make moves to keep them that way.
Freeddie Mac's weekly rate report says 30-year fixed-rate mortgages fell to an average 4.82 percent, down from 4.86 percent last week. A year ago, 30-year mortgages were averaging about 6 percent.
That data is over ten days old. Look at what happened to the market last week (from a mortgage industry site):
Yesterday was a
tough day for mortgage backed securities (MBS) but even tougher on
Treasuries. If you would like to see a graph of the carnage, Click here.
All lenders did reprice for the worse, with some increasing borrowing
costs by .50 in discount. That means if a particular interest rate
was costing 1 point in the morning, by day’s end it was costing 1.5
points. I do hope that short termers, consumers closing in the next 2
weeks, took our advice on locking. It appears the reason for the
selloff in treasuries is 2 fold. First, investors are anticipating a
massive supply of more treasuries which when you apply the law of
supply and demand, more supply drives price lower which raises the
yield. Also, there was a report that the US might lose its AAA credit
rating due to the massive amount of government spending that will have
to be funded by issuing treasuries.
This is a real problem for consumers. Consumers read the newspapers and think they should call a few mortgage companies and get some quotes; that's reactive. Proactive mortgage shoppers have their documentation lined up and are ready to pounce when a mortgage originator calls them to suggest locking in a low interest rate. We locked in about $2 million in loans on Tuesday (a day early) for seven customers. Thursday, the market started inching up and Friday resulted in a full .25% rise in mortgage rate.
I'm not saying that a borrower CAN"T handle the mortgage process by himself. I am saying it's a helluva lot cheaper for him to use an experienced mortgage broker.
