Monday, January 29, 2007

The outlook for 2007

The outlook for 2007 is unpredictable at this time. If somebody tells you that rates are going down in August they are just guessing.
Mortgages are now being sold on Wall Street. They are being bundled up in large groups and being sold as investments. Hedge funds and mutual fund even buy them. So rates are about as unpredictable as the stock market. There are many factors that cause the rates to go up and down. Economic conditions play a large role. How earnings come out, Whether the unemployment numbers are up or down, whether new housing starts are up or down. What economist's predict the inflation rate to be in the future, what the Federal Reserve says. All these things sway the rates daily and sometimes twice a day.
Every day the rates change according to the market. Just because a mortgage person told you the rate was 6% last week does not mean that it is 6% today! I have seen rates change as much as .25% in a day. If you are unsure of whether the rate is going up or down it is wise to lock in the rate.
Many times the broker or lender can switch banks if the rate goes down. Many loan officers won't tell you that because it means a lot more work for them. It also means that you are starting all over again from the beginning. Sometimes you even have to re-sign all the papers. So if you are in a rush or have a time frame you may not be able to get that lower rate because of the time it takes to re do the loan.
When a loan officer does this for you he is going out of his way. ( Who wants to do the extra work for the same pay?) Be sure to thank him.
If you want more information on mortgages go to www.russravary.com