Happy Friday! This weekend should be pretty good, the weather is starting to feel like summer, families will get together to celebrate father's day, and I will hopefully have enough time to wash my windows. Glamorous I know. After the week we have had with Mortgage Backed Securities (MBS) , I will take window washing. Everyday was a learning experience as even the best days turned into down days. Interest rates are going to take awhile to recover from the hit that the MBS are taking. There is just too much supply and not enough demand. Even with the Treasury purchasing MBS, the supply is too great.
But let us put interest rates into perspective. A 30 year fixed conventional loan for a purchase with 20% down and credit over 740, we are still at 5.5%. This is not a rate to snub your nose at. There was a time (less than a year ago) that same mortgage would have been 6.5%. Since I started doing loans 12 years ago I have seen that rate as high as 9%. Talk to anyone in the mortgage market in the 70s and early 80s and they will quote you anywhere from 12-18%.
That being said if you are considering refinancing and have a rate of 6.5% or more JUMP off the fence now and do it! If you are a buyer, no one knows where the rates are going to go, but can you really justify not purchasing a home at 5.5%? Your landlord is probably paying more than that on his mortgage. There is no more time to sit on the fence, it is time for action.
One last rant before I log out...a moratorium on foreclosures just prolongs the inevitable. If someone hasn't made a payment in 6-12 months another 3 months isn't going to help. Let's move forward, help those who are not so far behind keep their homes and be done with this heinous market.
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