Mortgage Interest Rate Flux

NEW -> Contingent Buyer Assistance Program
G

GrewUpInIrvine_IHB

New member
Can anyone explain why, when the Fed lowered the rate 75 basis points just 48 hours ago, that the rate on conforming and jumbo mortgages skyrocketed today?

Yesterday, I could have locked a Jumbo rate at 5.75 no points (through a credit union) and today, it shot up to 6.5% I saw similiar movement on E-trade - 6.5% no points to just over 7%!
 
Interests typically do not follow in step with the FEDs Funds Rate. Because of the housing information that was reported today many banks could be adding in a risk premium to cover defaults that they are seeing because of the current market.

Interest rates typically follow the 10yr t-note from everything I have read.
 
if you talking 30 year fixed, the short-term interest rate reduction will not have to much influence on the long term interest rates... you should have locked your jumbo at 5.75.... that's a really good rate for a jumbo... and as mentioned, the risk factor is also higher at jumbos...

sorry you missed your good rate... depending on when you close keep the rate floating a little longer... best of luck
 
not floating anything... but I am paying attention to rates because on a jumbo loan, 75 basis points means hundreds of dollars in monthly payment... but, I am probably looking to finally buy this year - maybe 6 months out... plenty of time for market jitters to work out...and yes, I know, not the bottom... but at least its definately not the top.
 
GrewUp - Wednesday mornings rates with the lowest in many years. You can trace the drop to the big gap down in bond yields on Tuesday. If you pull up the ticker of $TNX, you can see that on Tuesday, 10-year yields drop quite a bit. So on Wednesday morning at the open, rates were really low, but as buying in stocks took over, bond yields started shooting back up and the lenders has lots of repricings during the day. Today bond yields went up considerably again so mortgage rates will probably be even higher tomorrow.

I tried to lock in on a refi yesterday as well but got caught by the repricings.

http://www.marketwatch.com/tools/quotes/intchart.asp?symb=$TNX&sid=11420&dist=TQP_chart_date&freq=7&time=3
 
You must log in or register to reply here.
Back
Top