Good morning everybody. Great day for mortgage rates, with rates falling 0.05% – 0.10% for most home buyers and those looking to refinance. So if you are not yet under contract on your home, no worries. Rates are falling so you are not missing out as you look for your new home. If you’re refinancing with us, and haven’t decided to lock yet, we recommend giving it another 7-10 days. Here’s what you should know:

  • Good news for both FHA and Conventional loan programs. Compared to yesterday’s bond pricing, today we see rates falling (0.05% lower for Conventional, 0.10% for FHA). Hopefully you have not locked in your pricing yet! If you asked us for a quote last week, then the lender price for your rate is probably better now (larger lender credit, or lower lender fees).
  • Today’s average for a Conventional 30-year fixed rate loan is 2.93%, and for FHA, it’s at 2.65%. That’s just a national average, and some lenders are dropping their rates even further if you know where to look (we have lenders below this average).
  • Keep in mind, all lenders can offer 10+ different rates to you (lower rates will cost Discount Points, and higher rates come with lender credits. The appropriate rate is the one that saves you the most, upfront and over time, which is not always the lowest. Only pay fees if you will keep your home 8-10+ years).
  • On average, lenders across the country are reducing rates as the mortgage bond market improves. What is improvement? Investors are buying more bonds, which moves the price up. When lenders sell the mortgage to the investor for a higher price, they can reduce their fees (and rates). Bond improvement = lower cost to you. When the stock market does well, bonds do poorly (in general) and mortgage rates rise.

As always, you can follow the market with our friends over at Mortgage News Daily. Take advantage of the free tools we share with you through our subscription to minute-by-minute mortgage bond updates to help you know when to lock or float. These are the tools we rely on to help our clients decide when it’s time. We also use this data to better negotiate the lowest rates and fees for you with our network of lenders.

Why do rates change? Economic news (unemployment, inflation, stock market, Federal Reserve, etc). This week we will have 20 economic reports coming out that will impact bond pricing (and your interest rate). In the end, it’s anyone’s guess what the future holds, but there are some trends to be aware of. Not sure if now’s the time? Shoot us an email and we’ll show the pros and cons of locking and help you decide. Happy house hunting to our new buyers, and for those of you refinancing, we recommend floating another 7-10 days and then locking the rate if you are closing within the next 14 to 21 days.

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