Dennis' Mortgage Blog

Another roller coaster ride in the mortgage markets with relatively flat Monday and Tuesday followed by a very strong and positive Wednesday then a very negative closing on Thursday and Friday.  Despite a poor finish we closed flat for the week on rates.  The economic numbers had a lot of talk of inflation, but with the big drop in crude oil prices in August most “experts” (I love putting quotes around “experts”) feel the price pressures will ease as oil prices come back down.  See if this makes your morning paper:  today oil price per barrel had the biggest one day drop in dollar terms since 1991—I remember 1991, I was doing a lot of FHA mortgages with first time buyers; sort of like today but about 35 pounds ago!

Our forecast for the coming week is more of the same, rates jumping up and down on a daily basis and probably flat week over week.  This week we broke through a trading ceiling on prices on Wednesday, which should have given us a momentum for rates to slowly decline; only to see a floor of resistance broken on Thursday—portending higher rates.  So like a yo-yo our rates are daily up and down.  Plan accordingly. 

Looking ahead I see no reason to move off my position of having clients lock in their rates and terms through the end of escrow as soon as possible to protect from upside volatility.

In looking at the interest rates, a very noticeable change is the FHA rate dropping below the conforming rate last week and holding that position this week.  Note this is for “conforming-FHA” not the “FHA-jumbo”, but still it is significant as it shows the secondary market for government mortgages is stronger than for Fannie Mae and Freddie Mac. 

***ALERT*** NO CHANGE FROM LAST WEEK: Jumbo 30 year fixed rate pricing is not available; the most reasonable quote we have currently from our lenders is 8.5% at cost of 3.5 points.  5/1 and 7/1 ARM pricing is available on loans over $719,000---call for quotes.

NOTE PRICING BELOW IS BASED ON 20% DOWN FOR JUMBO LOANS AND 10% DOWN FOR CONFORMING, 3% FOR FHA, FULL DOC, AND FICOS OF 740 AND ABOVE (change from last Friday):

30 year conventional at 1 point 6.375%            ó  FLAT

30 year conforming-jumbo at 1 point 6.5%       ó  FLAT

30 year FHA at 1 point 6.25%                                    ó  FLAT

30 year jumbo at         NO PRICE CALL FOR INFORMATION              

Let me know how my 20+ years of experience can be of assistance to you, your family, friends or co-workers.  It is a great time to buy a new home!

Thanks to everyone for their referrals, it is the best compliment I can receive on my service, experience and products.

Have a great weekend!

Dennis