Mortgage Rates Significantly Higher to Start the Week

On Friday, we talked about how the Employment Situation Report contributed to higher Mortgage Rates.   The optimism surround the European debt crisis has also been hurting interest rates, and markets would have needed some very bad news out of Europe in order to reverse the momentum for higher rates that took shape last week.

Unfortunately, nothing reversed that momentum, and rates are significantly higher than last week.  If you're seeing local or national news talking about rates in the "high 3's," that info is already out-dated as Best-Execution rates are now solidly back in the 4's.   

Today's Rates: 

• BESTEXECUTION 30YR FIXED -   Up to 4.25%, some variation between lenders
• FHA/VA - 3.875%.  Lots of variation between lenders.
• 15 YEAR FIXED -  3.5%
• 5 YEAR ARMS -  low to mid 3% range, variations from lender to lender.

New Guidance: If you were floating before the jobs report and are still floating, rates are almost high enough that you should lock even with the big loss, but right now we're just on the edge between two different MBS coupons.  Think of these like the available "buckets" into which mortgages will ultimately be placed when they turn into tradable securities on the Secondary Market.  This means you can approach the upcoming days in one of two ways: either rates will continue higher in general, and the general range of rates would be 4.25-4.75% in terms of Best-Execution, OR we've hit a wall of sorts, and can either bounce lower or hold steady.  The more days you wait to determine this, the more money you'll lose if the first scenario plays out and the more you'd gain if the second scenario plays out.  If rates don't look like they're holding steady or improving by the end of this week, we'd be locking everything (and fairly close to that sentiment already, but feel it's at least one day too soon to say for sure).