The Fnma 4% bond actually gained 6 bps today...so rates may hold in the morning. (Improved today!) We are in the 4.625% range on the 30 year (60 day lock) and the 15 year fixed product is coming in at the 4.25% range...
WHAT!? I locked a loan today for a 15 year loan. This will refinance a 30 year mortgage...and the payment actually stayed the same... The family we are doing this loan for will save $31000 in interest over the life of this loan.
RETURN ON INVESTMENT: There is no other investment as limited as the closing costs on a refinance (cost can most often be part of the loan)...that carry the return of the lowered payments that are possible right now. I looked at another one today where for the 3800 in closing cost financed...the client was saving almost 120 dollars in INTEREST monthly... If that were expressed as an "annual return on investment" we could look at it as a 3800 dollar investment that will "earn" $1440 this year. ($120/month x 12 months = $1440) This is equivalent to nearly a 38% return on the "investment."
Reports out today suggest that the rapid economic decline we have been experiencing is slowing down and leveling off. Consumer inflation is about even according to the Consumer price index.
The REST of the WORLD: A global survey put out by Bloomberg today suggests that the perception worldwide is that things are heading in a positive direction. Many feel that efforts made by economies in the world working together will soon make a positive difference.
Dow is UP 109 points on the day today.
WATCH FOR SOME SELL-OFF'S for the weekend in the bond market as we have now had several days of gains. Remember that investors "preserve their profit" by selling the bonds they purchased several days ago that are now worth more due to gains. This usually happens late in the week...so it will be interesting to see. If this happens, it may cause substantial enought pricing deterioration to warrant some possible slight mortgage rate increases so stay tuned.
Tomorrow's report of how the feds are continuing to appropriate the TRILLION dollars they are using to keep mortgage interest rates low by purchasing mortgage backed securities will give us some clues as to where the feds are guiding rates. Remember: rates are affected by the specific coupons they are buying the most of...in addition to the sheer volume of dollars they are investing in mortgage backed securities.
Happy Day,
--
Chad Schauers
Have you metChad?
MetLife Home Loans
406.522.0922
406.522.0924 (fax)
1924 W. Stevens, Ste. 202
Bozeman, MT 59718
Cell: 406 799 8613
ccschauers@metlifehomeloans.com
