Mike’s Real Estate Show

The following is from Alicia Hodenfield who provides us with an Interest Rate update every Friday for this blog. This is one reason why you should, as a buyer, have all your paperwork submitted and get “credit approved” so when the rates bottom like they did on Monday–you can LOCK and LOAD that great rate which was 5.125%!

“Here’s my thoughts on what’s been happening with rates the last few days…

The Fed makes a surprise announcement – they are cutting the over night rate by .75% - down to 3.50%.  The international markets reacted as it would appear that the US economy might be in some trouble since the Fed to step in.  This seemed to have triggered a response with investors here, and as a result, the investors moved from the market to safer investments, like bonds.  This is when things started to look good for interest rates.  The better the bond market is doing, the better it is for interest rates.  So we woke up on Wednesday morning with the stock market losing and the bond market rallying.  Rate sheets reflected this good fortune.  But after a very bad day on Wall Street, it had been down by over 300 points and the market rallied up 500 points.  Money left the bond market to go back to the rapidly rising market.  This caused lenders to re-price, and re-price and re-price.  By the end of the day, the 5.125% rate I had available for a 30 year fixed rate, was hovering close to 6%.  That’s a lot of movement in one day.

 I am recommending to my clients that are thinking of refinancing, to get their paperwork into me now.  Even if the rates aren’t great, timing is everything.  If a client were to have approached me about refinancing on Wednesday morning it would have been too late to take advantage of the 5.125% rate.  But had I had their paperwork ready to go, I could have locked them into that rate. Rates were looking pretty good as of Friday afternoon – check my rates as posted by Mike Kelly!”