Hits and bumps WHAT'S THE RATE????

If you are like most people, before you call an actual human mortgage professional who might try to talk you in to something, you go to the web (which I'm told by Homer Simpson comes on computer's now). The problem is that rates are extremely difficult to track, especially considering all of the regional and loan specific price bumps that are baked in to each individual loan. It depends.... how much do you owe, what is your credit score, do you need cash, how big is the loan, what was your grandmother's middle name???? (mmmm.. last part doesn't matter so much). The worst thing you can do is watch the news or rely on the mainstream media to find out what kind of deal you can get. These outlets always seem to be a week behind what's actually happening, but why? The reason is because the nation's media uses the flawed timing of the Freddie Mac Mortgage market survey. I liken it's accuracy to weather reports in Minnesota...also flawed. If I need to know what the weather is doing, I use my window. It's sunny right now...I can see that! The Freddie survey collects from it's participants Monday through Wednesday and then publishes the results on Thursday. Huh? The point is, rates are a moving target and the price on a Wednesday or last hour can be vastly different from the price now. How about now? And so it tends to be a very frustrating search for rate shoppers who can find so much information by searching for Mortgage rates on the Internet that one could practically have their originator's licence. But the one thing you'd really like to know is the ever elusive price...right?!
Our solution: Primestar can save you all of this dreaded the hassle with an Instant custom rate quote. Or for those who would like to stay in the know without having to keep checking back please e-mail nkoster@goprimestar.com a request for Rate monitor.

Rates back down pheww!

Rates reached a high point last week of around 5.75 but have now relaxed by about half a point. So how can this volatility be explained and will rates stay at these historic lows?

The Federal Reserve has been flooding the mortgage market with money by purchasing billions of dollars' worth of home loans, which is what drove rates down this winter and spring. But the Treasury Department has started to borrow the mind blowing amounts of money needed to finance the record federal budget deficit, which is projected to reach $1.84 trillion this fiscal year, quadrupling last year's record $454.8 billion deficit.
This drove up the cost of all types of long-term debt, including mortgages, despite the Fed's best effort to keep rates low.

Rates started to go back down on Thursday 6/11.
The latest sell-off in Treasury bonds may have peaked, as a steep jump in yields finally has lured buyers off the sidelines.
That could end the upward pressure on mortgage rates, atleast for the time being.
Bonds are rallying today, driving interest rates lower, after the Treasury sold $11 billion in 30-year securities at a yield of 4.72% -- the highest auction rate in nearly two years but well below the 4.8% predicted by bond dealers in a survey by Bloomberg News.
"Something seems to have changed here" in terms of the market's mentality, said Charles Comiskey, head of Treasury trading at HSBC Securities in New York. "The price action is telling you" that rates have reached at least a short-term high, he said.
http://latimesblogs.latimes.com/money_co/

Here are today's rates at Primestar:

30 year fixed
Rate 5.25%
APR 5.371%
Details

15 year fixed
Rate 4.75%
APR 4.958%
Details


FHA
Rate 5.375%
APR 5.505%
Details

5 yr ARM
Rate 4.25%
APR 4.375%
Details

Perspective

Rates have jumped up to the mid 5% range due to dramatically increased volatility. “A lot of that has to do with uncertainty about whether the Fed will increase purchases of Treasuries. The market is looking for some change in the Fed’s plan.” according to Thomas Roth, head of US government bond trading. As a home owner or perspective buyer please keep in mind a little perspective amidst the gloomy headlines. Rates are still at a 40 year low. Since 1963, there have been only a hand full years in which the popular 30 year fixed has trended below 6%. These years include 1964, '65, '03, '04' and 05'. http://mortgage-x.com/trends.htm In the first half of this decade when rates were low & loans were being shamelessly allotted to anyone with a faint heartbeat, purchasing seemed the thing to do. As we all know however, home prices were elevated and have since notoriously deflated. Today in 2009, we are in a much different predicament. Rates are not only below 6% but as never before, they have averaged below 5.5 all year. Housing prices are down & in my opinion, very close if not at the bottom. While the Fed may be "stuck in a very difficult place" (Mark McQueen), for the rest of us there has seldom been a better time to buy.