Market Analysis

The bond market is worsening today on weaker than expected initial jobless claims for the week ended 4/19 and a stronger than expected March durable goods report which, while down, was down less than analysts were expecting.  Today there will be $16 billion of 5 year US Treasury notes being auctioned off which is on top of the record size auction of 2 year Notes auctioned off yesterday (deficit spending is paid for by sales of Treasury notes).   In order to attract demand for this additional supply of bonds in the face of a down morning bond market, yields/rates on these notes will likely be pushed slightly higher. It is very easy at times like these when there appears to be a reverse of the recent short term trend towards lower rates (rates appear to be starting to move back up) to get caught on the side lines waiting for the market to bounce back. Our position is that it is safer to lock now and then renegotiate if the market bounces back.   If you would like to lock with us, the first step is to be pre-approved.  You can access a short application form at http://www.ironharbormortgage.com/xSites/Mortgage/IronHarbor/Content/UploadedFiles/Iron%20Harbor%20Short%20Application.pdf
If you lock and the market improves dramatically, we are able to renegotiate once and get within .375 points in closing costs of current market.  For example if the market improves to 5.625% with 0 points, we can renegotiate once to 5.625% with .375 points.  It is important to note that even though when renegotiating there is a .375 point adjustment to closing costs, usually we renegotiate rates to a rate sheet that is very short-lived and, therefore, most of our borrowers get a better rate renegotiating than if they were just trying to call in and get their loan registered and locked to start with.
Posted by Matthew Breston on April 24th, 2008 8:17 AMPost a Comment (0)
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