Mark Simons: Mortgage Rate Update and What’s in Store
By: Mark Simons
May 6, 2010 (FreeRateUpdate.com) – The POV* loan rate came out and repriced by most Wholesale Lenders for the better at least once and TWICE with some others. Conforming at 4.750% and High Balance Conforming at 5.000%. SUPER Jumbos are at 5.625%. Scenarios, questions and conspiracy theories can be emailed to me at lololoans@yahoo.com
Which way is UP? Well, not today with the Market’s Wild Ride. However a little lookie-poo at what is simmering on the back burner tends to have me running for 30yr safe haven. With the economy in Greece dragging down the Euro and sending ripples to the US Markets, I see cause for concern. This cannot bode well for rates in the long run. And, according to the Consumer Price Index released on MOANday, Inflation is up 2% over this time last year. Remember class, Inflation has roughly the same effect of interest rates as yelling “FIRE” in a crowded movie theatre. An (upward) stampede is likely to follow.
SO? What Loan is the best right now? The ARMs are indeed tempting, and if you intend to be in the home or the loan 5yrs or less, then yes, by all means jump on that Conforming 5yr 3.5% rate loan at zero pts. But if you are not sure..not absolutely sure…then you have to go with the 30yr fixed. The percentages are in your favor for peace of mind in facing lawd knows WHAT coming down the road in the next year or so.
*POV = Plain, Old, Vanilla Home Loan: 30yr fixed rate at Par, fully amortized, Single Family Residence, Owner-Occupied, at least 20% equity, lower rates and fees for good grammer and posture.