Long Beach Mortgage Rates Report- August 28, 2007- Lock All Loans
Leave a comment »Our Long Beach Mortgage Rates Report from last week advised clients to float their loans.
Long Beach home buyers who listened saved money; rates decreased an average of .125% this past week. Mortgage bonds are trading near their 200-day moving average which means that the next 2-3 days may show the absolute best rates in 6 months on the fixed-rate mortgage side. We think there is more risk to rates rising before the Fed meeting in September than there is opportunity for lower rates during that period. That risk convinces us that locking in all loans at application is more prudent than floating at this time. If mortgage bonds continue to rise through the 200-day moving average, we’ll be wrong. Nonetheless, you pay us to make the tough choices and we think it makes sense to be careful, lock in rates, and enjoy the little risk we took last week.
One of our portfolio lenders is offering an annual ARM, interest only, at 5.5% with an APR of 6.44%. This means that the first year is locked in at 5.5%, the second year at 6.44%, and then the loan becomes a LIBOR-based ARM. There is no pre-payment penalty associated with this loan. We particularly like this loan product because we believe that interest rates are in a 12-24 month downward trend; we think there will be some opportunities to refinance to a fixed rate loan as low as 5.5% in the next two years. Borrowers with a short-term horizon (meaning they may consider a move in 12-24 months) should ask for more information. Admittedly, this is a teaser rate but sometimes teaser rates have the right application when the hold timeframe matches up to the interest rate term.
| Mortgage Interest Rates* | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rates as of 08/27/2007: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| *Rates are subject to change due to market fluctuations and borrower’s eligibility. |
| Laurie Manny Long Beach Realtor (562) 212-5420 |
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| Main Street Realtors Belmont Heights 244 Redondo Avenue Long Beach California 90803 |
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