The Market Giveth and Taketh Away
Refinance rates popped up again this week following the usual roller coster ride of 2008. The government takeover of Fannie/Freddie gave us a nice half point drop in rates a couple weeks ago, but that rate reduction was quickly absorbed by the announcement of a governmental 700 billion dollar proposal to buy up mostly bad mortgage debt from banks and investment firms.
Risk is rising, so the mortgage spread premium has risen in kind. Also putting a strain on refinance rates was the overnight rise in the 10 year treasury yield by over one quarter point!
There is a tremendous amount of economic news coming out, so it's difficult to tell which way the wind will blow regarding refinance rates, but one thing for sure... we will continue to see significant flucuations in mortgage rates.
The huge government bailout plan could end up being a wash for refinance rates, but overall, should be a tremendous help to stabilizing home prices. Let's hope that the plan also includes a loosening of the belt for Fannie and Freddie for home purchase financing.
Yes, underwriting guidelines should be tough enough to follow proper debt-to-income standards to make sure prospective homebuyers can afford thier new mortgage payments.... but ... current guidelines are excluding many, otherwise qualified homebuyer candidates from purchasing for lack of adequate cash to get in the door. A stabilized housing market will go a long way toward opening up new and less restrictive homebuyer mortgage programs.
May the Mortgage Rates be with You!
Refinance Tool Box
Risk is rising, so the mortgage spread premium has risen in kind. Also putting a strain on refinance rates was the overnight rise in the 10 year treasury yield by over one quarter point!
There is a tremendous amount of economic news coming out, so it's difficult to tell which way the wind will blow regarding refinance rates, but one thing for sure... we will continue to see significant flucuations in mortgage rates.
The huge government bailout plan could end up being a wash for refinance rates, but overall, should be a tremendous help to stabilizing home prices. Let's hope that the plan also includes a loosening of the belt for Fannie and Freddie for home purchase financing.
Yes, underwriting guidelines should be tough enough to follow proper debt-to-income standards to make sure prospective homebuyers can afford thier new mortgage payments.... but ... current guidelines are excluding many, otherwise qualified homebuyer candidates from purchasing for lack of adequate cash to get in the door. A stabilized housing market will go a long way toward opening up new and less restrictive homebuyer mortgage programs.
May the Mortgage Rates be with You!
Refinance Tool Box
posted by Jim Bisnett at
2:57 PM
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