Mortgage Rates: Risks Still Manageable on Day to Day Basis
After the "high risk events" of the week reached a crescendo yesterday, today's market movements offered a bit of reprieve for mortgage rate watchers. That reprieve wasn't seen until this afternoon, however, but borrowing costs did improve marginally over yesterday's updated lender offererings. There's always risks involved in floating, but a majority of the week's influential events are now successfully behind us. We think it's safe to down grade the risk advisory meter from high risk to cautious/guarded.
That means we're not expecting the recent rates range to be broken as swiftly as might have the case earlier this week. That DOESN'T mean you should not be defensive. Day over day risks are however limited to volatility in closing costs.
WHY?
The mortgage rate/borrowing cost "range" we keep referencing is so stable that it would require a significant shift in bias of the secondary mortgage market for a floating borrower to totally lose their current quote all together. WE WILL ALERT OTHERWISE (an MBS coupon shift). So, while you might experience some unexpected increases in closing costs, floating day over day is not likely to make a big difference in your individual scenario. BEWARE: listen to you loan officer if they say "no fooling around". They know better and have more information than us about you).
Plain and Simple: For those among you who do not have an urgent need to refi/buy or who are prepared to weather the storm of increased costs, this is the first day in a while where a case could be made for delaying a lock decision. Just be aware that if the market were to move against you in that decision, there would come a time to "cut your losses" and move forward with a less attractive scenario. This is not likely to be tomorrow. Bottom line is that we're far enough away from that line in the sand where losses would need to be assessed one day at a time.
As far as actual rate sheet levels out there in the market, best-execution rates have been so squarely pinned at the same levels for so long, that I think we can save a lot of space tonight and suffice it to say that COSTS improved by .125 - .250 of 1% of your loan amount today. The best-execution rate is unchanged at 4.875, but the costs involved in obtaining that rate decreased. (i.e. $125 for every $100,000 in loan amount). To see the disclaimer on this rate and read more about what exactly "best-execution" means, here's last night's post. On a final note, please do me a favor and enter a comment below to let us know if you'd like to see things formatted this way in the future or if you'd prefer to have the full-meal-deal all in one place.