10/22/2013: Well it is good news if you are locking your mortgage today. With employment numbers falling short by about 32,000. The Feds took measures to continue buying mortgage backed securities (MBS's) which in turn whacked interest rates today. A typical FHA 30 YR FX High Balance loan is in the high 3% range with paying the point. (1% point cost). A no cost FHA 30YR FX High Balance loan is in the mid 4% range. For people with great credit looking at conforming 30YR FX products par pricing is in the lower 4% range.
In May when the Housing Reports were showing strong numbers the Federal Reserve thought the economy was improving so they would stop pumping $40Billion a month into the markets. That fear drove rates from 3.57% up to 4.65% in weeks. That rapid increase dried up the refinance business and put a lot of home purchasers out of their comfort levels. In September the Feds announced they will continue with a third round of Quantitative Easing (QE3). With the results today, things are not so bright as they seem. The economy is continuing to show signs of weakness.
With QE3 still on the horizon all Government backed mortgage products as well as Fannie Mae and Freddie Mac loans should start seeing signs of suppression. What that means for you, if you have equity in your home, think about refinancing again. If you are nervous about purchasing, you might want to get off that fence, get your paperwork together, and go start looking...again.
**About the Author** Mike Brown (NMLS 333411) is a licensed mortgage loan officer in Marin County California. You can reach Mike Brown on Google, or if you prefer email the address is mibrown@clrloans.com.
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