San Diego, CA (PRWEB) August 08, 2014
The trend for lower rates has been apparent this week, as a weak economy makes overseas influences more of a deciding factor for mortgage rates. Today, rates looked as if they would be able to break even lower than the day before, but in the end rates managed just slight gains due to a turn around in bond markets in the afternoon after news from Russia announcing their plans for withdrawal of their military operations on the Ukrainian border. Blue Home Loans, Inc., a California-based full service mortgage company that has been helping CA residents find the best rates and loans available for many years, has been keeping track of these recent mortgage rates trends and now comments on the current situation and offers some advice for those who are not sure how to proceed with their home loan plans.
An August 8th report from Mortgage News Daily gives some further insight into the end-of-week happenings in the mortgage rates world. It says, “During the most normal of times in the mortgage world, rates will take cues mainly from economic data. The stronger the economy, the more rates move up and vice versa. The current dynamic, however, places an inordinate significance on other factors. These include the geopolitical risks around the world a weakening Eurozone economy, and the prospects for increased easing on the part of the European Central Bank. All of the above increases the demand for safe-haven assets like US Treasuries. The mortgage-backed-securities (MBS) that most directly affect rates tend to see far less benefit than Treasuries during these types of moves.”
The same article continues, explaining, “This was indeed the case overnight as headlines about potential US air strikes in Iraq sent Treasury yields plummeting. When MBS started trading this morning, they were only moderately stronger. As such, mortgage rates started the day in stronger territory but didn't move nearly as much as Treasuries. Adding insult to injury, bond markets turned around in the afternoon after Russia announced it was wrapping up temporary military operations on the Ukrainian border. Several lenders repriced to higher rates shortly thereafter. The upside to all this is that mortgages take less of a hit than Treasuries on the way back up. The challenge comes in identifying a short term correction vs a longer term change in trend. For now, the trend is toward lower rates, but to be sure, that's been less easily seen in Mortgages. Also keep in mind that even if the longer-term trend manages to remain favorable, there will be periodic corrections that can last long enough to make you regret a decision to float.”
Blue Home Loans explains that the chance for these “periodic corrections” is much greater after days like today where a strong move in bond markets failed to push rates lower. Because of this, the risk still outweighs the reward when it comes to the lock/float decision. As such, those who are near to closing on their loans should think about locking in at their soonest opportunity, as rates could rise over the weekend. Those who have a longer time frame to work with may wish to wait things out, as there is a chance rates could push the limits lower – however, there will likely be some increases along the way as well. For those who are just starting out with their loan application, locking in on application is always an option, but borrowers should consider doing this with a lender that allows for renegotiation, as this will give them some leeway if rates do drop much lower before they finalize their home loan.
Blue Home Loans can help California borrowers who are looking for the best rates, lenders and loan programs to find exactly what they need so that they can take advantage of today’s lowest mortgage rates and save money on their loans. As the Blue Home Loans website says, "We make finding a loan simple because we have virtually every loan program available, regardless of the type of mortgage you are looking for. Whether you are dealing with bad credit, foreclosure, bankruptcy, or low credit scores, we can help you. It only takes us five minutes to find the right program that fits your needs."
For more information on how Blue Home Loans can help California home loan borrowers get approved for their home purchase loan or refinance quickly, please visit BlueHomeLoans.com or call 1-888-929-BLUE (2583) to speak with an experienced mortgage professional.
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