Rates at the Highest Point in a Month - Look for a Window to Lock

The Fannie Mae 30 year fixed mortgage bond closed at 103.53 on 20 October, but has fell every day since and closed yesterday at 102.68. Every 12 basis points drop represents .125% higher points/lower closing credit. That means that since 20 October, though rates are the same, the cost for every rate has gone up over 70 basis points, or .75%. I my last blog entry I forecast this would likely be the case and many responded by applying and locking. A slightly better economic outlook and the Federal Reserve chief's recent comments regarding stimulating inflation have pushed rates higher. This morning jobless claims were reported down for the third straight week and stock futures are up before the opening bell.  

Lock or Float?

Rates are headed up so if you plan to refinance to take advantage of historic lows you should apply online and then be ready to lock if a window of opportunity arises. For example, this morning in early trading the Fannie Mae bond is up 25 basis points so rates may be either the same or slightly better than yesterday's close. But that could be a very short opening if stocks respond well to the jobless claim numbers and other economic reports show improvement. My advice, follow me on Twitter and watch for opportunities to lock. My advice this morning will be to Apply and lock. Remember, to lock your application must first be pre-approved so the first step is to apply online.