Mortgage rates rose, yesterday afternoon and early today. Yesterday's decline was old-fashioned profit taking, by mortgage bond traders. Today, the renewed theme of economic recovery and Government overborrowing revived the inflation hawks from the dead:
Treasuries fell for a second day as the index of U.S. leading economic indicators rose more than forecast in May and the U.S. prepared to announce the amount of 2-, 5- and 7-year notes it will sell next week.
Ten-year yields climbed from a two-week low amid concern President Barack Obama’s record borrowing will overwhelm demand as the deepest recession in 50 years shows signs of easing. A government report showed manufacturing in the Philadelphia region contracted at the slowest pace in nine months and the Labor Department said the total number of people continuing to collecting unemployment insurance dropped for the first time since January.
This is why I'm "biased towards locking rates". We had been floating loans since last Friday and yesterday morning, I locked on the early strength. Amazingly, the mortgage rates market deteriorated by .375% in rate between NOON (PST) yesterday and this morning. I'd like to say I'm prescient but I"m just risk averse. When the mortgage bond traders sell off to the extreme, I'll float for a few days but I never want to be to greedy. That's why I pulled the trigger yesterday morning and initiated locks.
Let's continue the bias and lock all new loans at application. I think we'll see weakness through tomorrow and Monday in fear of the amount of money the Government borrows.
We're back to Monday's original rates:
Conv 5.3755% (no points) 5.125% (1 point)
FHA 5.5% (no points) 5.25% (1 point)
VA 5.5% (.25 point) 5.25% (1.25 point)
All loan quotes assume a 740 credit score, full income documentation with acceptable debt-to-income ratios, and required down payments (20% for conventional, 3.5% for FHA, and zero-down for VA). We will charge a 1% origination fee plus a $695 processing fee.
Apply online now. It's really simple and should take about 20 minutes.
