Alarmclock no you cannot lock any mortgage rate in advance. You need to send in the fully executed purchase agreement on a home to get the loan process started.
I am by no means a mortgage expert however I was under the impression that many of the resets were to the Libor rather then the Fed Funds. Not that it makes a whole lot of difference…
The 10 year treasury yield is still the best vehicle IMO to track long term mortgage trends. However the premium for underwriting these has increased. Once upon a time I used to use about 1.25% as a fudge factor off of the 10 year to guestimate a fully amortized (conforming) 30 year fixed rate mortgage at 1 point. Now I am not so sure what value to use.
I actually do believe that if we ever enter a point where mortgage rates are depressed to ridiculous values (say 5% for a fixed 30 year jumbo) then yes IMO that will help prop up sales as long as there is not a wholesale recession. Now I don’t see those rates ever happening… but ya never know. Wall Street and our government may do anything to hold off the big bang.
