Mortgage Rate Update for April 30, 2010

The following is a mortgage rate update for April 30, 2010
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Terms: (A+ paper)
Purchase money, Owner Occupied, 60 day rate lock, Full Doc.

ALL RATES ASSUME 1 POINT

JUMBO
30 yr Fixed                       5.375%                    (unchanged)
5/1 ARM                             5.000%                   (unchanged)
7/1 ARM                            5.125%                    (unchanged)
10/1 ARM                          5.250%                    (unchanged)

CONFORMING (up to $417,000)
30 yr Fixed                        5.000%                  (unchanged)
15 yr Fixed                        4.250%                   (unchanged)
5/1 ARM                             3.625%                   (unchanged)

CONFORMING + LOANS (417,001 – $729,750)
Purchase and no cash out, use conforming rates add up to 1/2 point fee at closing depending on scenario.
These price adjusters are subject to change

Prime Rate = 3.250%                                      (unchanged)

APR: 30 yr = 5.27%, 15yr = 4.66%, 5/1 = 4.44%, 10/1 = 4.99%

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:: Market Update ::

Starting with some good news, the Core Inflation Rate came in very tame. This is significant because it gives the Fed ammunition to keep short term rates lower for longer while the economy recovers.

When the Fed does start to raise rates, the “Carry Trade” comes in to play. Simply put, this is when large investors borrow cheap and invest at a higher rate of return. When the cost of borrowing starts to go up, these investors need to quickly ‘unwind’ their money which will certainly have an impact on mortgage rates.

In Fed news, there was a $32 Billion Treasury auction this week and it was well received. The economic news coming from Greece was expected to impact investor appetite but this did turn out to be the case. As a result, rates remain flat from where we started the week.

Lastly, today the $8,000 tax credit for first-time home buyers and the $6,500 tax credit for repeat home buyers expires. Hope you snuck your purchase contract in on time…

Have a great Weekend!

Dan Spitz
Private Mortgage Banker
Wells Fargo Home Mortgage

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