Notes From The Mortgage Insider

Dear Friends:

I hate to keep harping on the same thing over and over, but almost all of the leading commentators in my industry are singing the same refrain right now – if you would benefit from a refinance to a lower rate, do it now and don’t wait (hey, that rhymes!).

RISMedia, a widely read blog, says, “Take advantage of record low rates before they rise.” They are referring to the ridiculous method that Congress used to fund the extension of payroll tax cuts, which was to charge the two-month cost of the tax cuts to the (imagined) Fannie and Freddie credit card. That means that agency (conforming) mortgage loans will very soon have a premium cost attached to them to pay for the payroll tax cuts. Terrible policy to mix the two but that’s our dysfunctional government right now.

In addition, as I mentioned last week, global risk (Europe, Iran, etc.) is very high right now and any exogenous shock from those sources will most likely cause a substantial spike in mortgage rates.

Notwithstanding the negative outlook I have painted, mortgage rates remained at historic lows last week. The best rates, referred to in the industry as the “best-execution” rate (named without a trace of irony), is approximately 3.875% to 4.000% for 30 year fixed agency conforming loans. Pretty darned good!

Steven Hofberg, Operations Manager, Residential Mortgage Center Inc

To contact Margie Hofberg email her at margie@rmcenter.com. If you wish to be notified when she posts the weekly Newsletter simply click on the Subscribe button below. To be added to the weekly Newsletter email distribution list email Renee Bourassa at renee@rmcenter.com.