Rates have been really low now for over a year. Most recently we’ve had some add’l improvement giving us the lowest levels the industry has seen all year. In spite of rates being so low, many people are turning to a shorter, 10 year mortgage loan because those rates of course are even lower. Check out this article http://www.thisismoney.co.uk/money/mortgageshome/article-2858084/Lock-mortgage-decade-record-low-rate-number-10-year-fixed-rate-mortgage-deals-increases-fourfold-one-year.html
The article discusses how rates have no where to go but up. I definitely agree. While I said above that we’re at the lowest levels we’ve seen all year, that was actually last week and those rates still pale in comparison with the rates available in January 2013. Take a look at this picture:
What it shows is a candlestick chart of the mortgage backed securities chart. Its showing the price of the 3.5% FNMA 30 year coupon bond. In other words, the bonds that are driving the mortgage rates on the 30 year fixed. Without getting too technical, some basic understanding of how to read this chart will help the explanation. The dates are along the bottom and the price of the bond is on the left. Mortgage rates have an inverse or opposite relationship to the mortgage backed securities that they are derived from. So the higher the price of the Bond, the lower the interest rates. The far right of the graph is now, and the far left is December 2012. So by the time the article I’ve referenced was written, rates had already risen from the lowest rates of the year. But if you look to the left, you can see that in both December of 2012 & April of 2013 that the MBS were much in price, the 106.5 range and today we’re at a modest 103.75. That is quite a bit of difference.
So while the article is talking about people locking in 10 year fixed rates, my take away is that they are confirming that rates have really nowhere else to go but up. So what do you do then? How do you get the best rate? The best Deal? You have to painstakingly monitor the market and do your research but more importantly you have to time your application with the market as well.
If you wait until rates are the “lowest they’ve ever been…” you’ve already missed them mark. First because by the time you call your mortgage lender to get the application in, rates are already back up as I’ve shown you in the graph from last week to this week. The second reason is that most of the news and information that is available doesn’t make it to the market until its too late. The article I referenced above came out yesterday. Rates were better the week before. By the time the news and the writers get this info, digest it, and then make it available it’s already outdated. I can help you with that. I provide real time information on where the mortgage rate market is moving. You can have that information arrive in your inbox either weekly or daily by signing up at this link http://www.rate-mastery.com/LoOptin.aspx?id=Chris_Reese_9165021656&p=WidgetTiny1 This is just my way of helping you keep your thumb on the pulse of the mortgage market.
If you have questions about your mortgage, refinancing, or purchasing another home don’t hesitate to contact Chris Reese, Certified Mortgage Planner at 916-502-1656 or inquire online at http://www.sacramentohomeloanspecialist.com/forms/askAnExpert.html The answer to all your mortgage and real estate questions are just a phone call or a click away.
From 30 Year Fixed Rates to 10 Year Fixed Rate Mortgages and Staying Informed
