Last week the Fed announced they’re stepping up their purchase of mortgage backed securities to help keep mortgage rates low. While they are doing this, the FHFA (oversees Fannie Mae and Freddie Mac) is increasing the cost of conforming mortgages by increasing the “g-fees”. I’m seeing banks and lenders increasing rates from 0.25 to 0.50 in fee (the cost for a certain rate) and up to 0.625% more with extension fees (when your loan does not close in time).
My advice with mortgage rates tends to be that if you like the rate, you should consider locking it. When it comes to locking rates, do a “gut check”. If you’re more uncomfortable with having a certain rate secured (locked) while rates may improve or if you can stomach not being locked and having mortgage rates increase.
Here is a list of some of the economic indicators scheduled to be released this week:
Monday, Sept. 17: Empire State Index
Wednesday, Sept 19: Building Permits, Housing Starts and Existing Home Sales
Friday, Sept. 21: Initial Jobless Claims and Philadelphia Fed Index
As I write this post (9/17/12 at 8:45am PST) I’m quoting 3.500% for a 30 year fixed based on a loan amount of $400,000 with a sales price of $500,000 (80% loan to value). Seattle area home buyer has credit scores of 740 or higher and the purchase is closing by October 25, 2012. (apr 3.566) with closing cost estimated at $3525 and a principal and interest payment of $1,166.67 (taxes and insurance are not waived).
If you would like me to provide you with a mortgage rate quote on a home located anywhere in Washington, please contact me.