Our friend the 10 year

[SD Realtor]

Just a reminder that while prime rate cuts don’t affect long term mortgage rates, our friend the 10 year treasury yield is moving closer to the monster low it hit back in the spring of 2003.

If you are a homeowner you may want to seriously consider refinancing if it drops much lower. I am definitely keeping my eye on it. I have noticed long term rates are still being pretty sticky but if that yield keeps moving they will have to go down because someone will blink unless the secondary market just locks up. Even if that does happen it would not surprise me to somehow see some behind the scenes backing by the government to somehow grease the secondary market.

Anyways on a side note cds are pretty useless now…I have one maturing in another day and this surprise move by Ben has me fuming…

I would bet experienced guys like Chris S have made an absolute killing in these yield movements. The real question will be when to pickup a rising rates fund for the 10 year…

[cashflow]

Hi SD R,

I’m watching this closely as well as we want to refi our rental home. I noticed on Bankrate that usually I would get up to 10 different quotes, now I’m only seeing about 5 come up for this area….do you think this is due to the credit crunch, just not as many willing to finance in this region?? Mortgage Capital Assoc. usually had lower rates and quote a reasonable fee, they are at 5.1% today…not too bad…

What are your thoughts on how low this could go? I’m excited to get this done though and long term have a great rate and save some $$$. On the flipside, we too had a CD resetting, but it locked in beggining of month, still not too good though.

Can’t have it all!

[SD Realtor]

Guys –

HLS or Pasadena broker and mortgage professionals have more expert takes then I do. With that said long term mortgages have ALWAYS trended in the same direction of the 10/30 year treasury yields. The risk premium that is built in by the originators will fluctuate based on many factors but mostly on the secondary market. When we saw the secondary market lockup in August, that risk premium jumped way up. However memories are short and it went down after several weeks. Obviously the risk premium for a conforming loan that is FHA approved is the lowest. The premiums go up with jumbos, etc…

Now how low will rates go? Don’t know and don’t have a clue. Will they TREND in the same direction as the long term treasury yield? Absolutely. Will the risk premiums vary? Absolutely.

Your mission then is to find the best time, that is when the 10 or 30 year treasury yield is low AND the risk premium is low. Since you do not have much knowledge of the risk premium all you can do is monitor the 10 year.

Of course there is continuing bad news about foreclosures but for people to think mortgage rates will not budge while the 10 year yield plummets is not realistic.

Finally, long term rates do not just move lock step with the 10 year. As any shmuck in life knows, you get screwed on the way down and double screwed on the way up. In other words, lenders are sticky on the way down and they will not lower rates immediately even though the 10 year may go down. They may wait a day or a few days to make sure it doesnt spike back up, then they will lower them. Also many times one will not lower a rate until the other does, then they all do at once. Of course the SECOND the yield moves back up they all raise rates up immediately.

SD Realtor

[kicksavedave]

Great thread and very timely info for me. I’m 60 days from closing on the new home near Denver. The builders lender has offered a 95% loan for 5.65% with the PMI built in and they will pay all the closing cost. They want me to lock that in but I see little to no upside in doing that right now, only downside with the 10 and 30 T’s yields plummeting. I’m going to let it ride in hopes that another 1/4 point or more drop in the next 60 days materializes.

Am I being greedy, or smart?

[SD Realtor]

Tough call man…greedy or smart… usually they do not go hand in hand…let’s just say you are trying to get the best rate possible and leave it at that.

Like I said, I am not expert on the bond market. That is where guys like Chris S and the experts come in. All I can tell you is to keep checking that 10 year treasury yield every day or more…

Sometimes the lenders have a 1 time rate adjustment but I take it the program you are looking at does not have that eh? That allows you to lock in BUT you also get a 1 time chance to relock during the escrow period.

SD Realtor

[Eugene]

The $64,000 question: how far can US 10-year treasury go when you can buy 10-year French Euro-denominated bonds yielding 4.5%?

[SD Realtor]

That is the problem esmith. Common sense would dictate that the 10 year would not go down more because of your statement and other rationale. However common sense would have also dictated that in order to get our own financial mess in order we should have seen higher interest rates many years ago. How do we know that the there is not any behind the scenes nudging of purchasers both foreign and domestic of US debt.

If you try to out think the market generally you lose. I am not saying you are incorrect. I am just trying to say that long long ago I gave up trying to apply my simplistic rational analysis. The marketplace is not controlled by common sense and visibility. Unfortunately I believe it is much more controlled by other forces of which I and the general public have little to no control over. So all I can do is watch it, try to make money off of it and get the best deal I can off of it.

As I say there are many many who are well versed in the bond market and bond trading. You very well may be quite correct in your analysis. My stance is a bit more cautious which is, I have no clue where the bottom is, but someday it damn well has to go up… and farther into the future way up.

SD Realtor

[ucodegen]

@SD Realtor

If you try to out think the market generally you lose. I am not saying you are incorrect. I am just trying to say that long long ago I gave up trying to apply my simplistic rational analysis. The marketplace is not controlled by common sense and visibility.

Common sense and visibility no, but it is predictable over the long term (ie. what we knew would happen for housing’s rapid price run-up). Over the short term, all bets are off. It is all manipulation and emotion.

[SD Realtor]

Well said uco, I agree.

SD Realtor

[NotCranky]

http://finance.yahoo.com/echarts?s=%5ETNX#symbol=%5ETNX;range=1d

[donaldduckmoore]

Can I refi a house that I purchased a month or 2 ago? The contract does not have prepayment penalty though. Thanks.

[vizcaya]

Yeah, I purchased back when rates were 6.5 for a 30yr fixed, then a couple months later I locked in to a 5.375 30yr fixed.

There is some calculators out there that can help you decide if it is worth refi’ing

[donaldduckmoore]

I remember a few years back when I did my refi, it was no point no fee refi. Are they still available now?

[NotCranky]

Hey SDR I thought I’d bump this up a couple of times to see if you catch it. Should be a little fun for you as this ten year is your baby and you called this low. It didn’t/hasn’t quite hit the 2003 low but it got pretty close. I locked on my building money on Tuesday and have been calling former clients to give them a heads up on refinancing opportunities.

[SD Realtor]

Rus you did good man. To be honest I am really surprised that the bond market has remained so strong. If you look at the past few weeks we have been really stuck in a pretty narrow trading range. It tried to break out to the up side a few weeks ago as people were selling off a little bit… it crawled up to like 3.9 but then as more sh-t hit the fan people ran for cover again. Good for you for locking into the low rate!

SD Realtor

[NotCranky]

A lot of thanks goes to you for just getting me to focus on this more. I am calling a bottom now for the next decade!

[NotCranky]

A lot of thanks goes to you for just getting me to focus on this more. I am calling a bottom now for the next decade!

[NotCranky]

A lot of thanks goes to you for just getting me to focus on this more. I am calling a bottom now for the next decade!

[NotCranky]

A lot of thanks goes to you for just getting me to focus on this more. I am calling a bottom now for the next decade!

[NotCranky]

A lot of thanks goes to you for just getting me to focus on this more. I am calling a bottom now for the next decade!

[SD Realtor]

Rus you did good man. To be honest I am really surprised that the bond market has remained so strong. If you look at the past few weeks we have been really stuck in a pretty narrow trading range. It tried to break out to the up side a few weeks ago as people were selling off a little bit… it crawled up to like 3.9 but then as more sh-t hit the fan people ran for cover again. Good for you for locking into the low rate!

SD Realtor

[SD Realtor]

Rus you did good man. To be honest I am really surprised that the bond market has remained so strong. If you look at the past few weeks we have been really stuck in a pretty narrow trading range. It tried to break out to the up side a few weeks ago as people were selling off a little bit… it crawled up to like 3.9 but then as more sh-t hit the fan people ran for cover again. Good for you for locking into the low rate!

SD Realtor

[SD Realtor]

Rus you did good man. To be honest I am really surprised that the bond market has remained so strong. If you look at the past few weeks we have been really stuck in a pretty narrow trading range. It tried to break out to the up side a few weeks ago as people were selling off a little bit… it crawled up to like 3.9 but then as more sh-t hit the fan people ran for cover again. Good for you for locking into the low rate!

SD Realtor

[SD Realtor]

Rus you did good man. To be honest I am really surprised that the bond market has remained so strong. If you look at the past few weeks we have been really stuck in a pretty narrow trading range. It tried to break out to the up side a few weeks ago as people were selling off a little bit… it crawled up to like 3.9 but then as more sh-t hit the fan people ran for cover again. Good for you for locking into the low rate!

SD Realtor

[NotCranky]

Hey SDR I thought I’d bump this up a couple of times to see if you catch it. Should be a little fun for you as this ten year is your baby and you called this low. It didn’t/hasn’t quite hit the 2003 low but it got pretty close. I locked on my building money on Tuesday and have been calling former clients to give them a heads up on refinancing opportunities.

[NotCranky]

Hey SDR I thought I’d bump this up a couple of times to see if you catch it. Should be a little fun for you as this ten year is your baby and you called this low. It didn’t/hasn’t quite hit the 2003 low but it got pretty close. I locked on my building money on Tuesday and have been calling former clients to give them a heads up on refinancing opportunities.

[NotCranky]

Hey SDR I thought I’d bump this up a couple of times to see if you catch it. Should be a little fun for you as this ten year is your baby and you called this low. It didn’t/hasn’t quite hit the 2003 low but it got pretty close. I locked on my building money on Tuesday and have been calling former clients to give them a heads up on refinancing opportunities.

[NotCranky]

Hey SDR I thought I’d bump this up a couple of times to see if you catch it. Should be a little fun for you as this ten year is your baby and you called this low. It didn’t/hasn’t quite hit the 2003 low but it got pretty close. I locked on my building money on Tuesday and have been calling former clients to give them a heads up on refinancing opportunities.

[donaldduckmoore]

I remember a few years back when I did my refi, it was no point no fee refi. Are they still available now?

[donaldduckmoore]

I remember a few years back when I did my refi, it was no point no fee refi. Are they still available now?

[donaldduckmoore]

I remember a few years back when I did my refi, it was no point no fee refi. Are they still available now?

[donaldduckmoore]

I remember a few years back when I did my refi, it was no point no fee refi. Are they still available now?

[vizcaya]

Yeah, I purchased back when rates were 6.5 for a 30yr fixed, then a couple months later I locked in to a 5.375 30yr fixed.

There is some calculators out there that can help you decide if it is worth refi’ing

[vizcaya]

Yeah, I purchased back when rates were 6.5 for a 30yr fixed, then a couple months later I locked in to a 5.375 30yr fixed.

There is some calculators out there that can help you decide if it is worth refi’ing

[vizcaya]

Yeah, I purchased back when rates were 6.5 for a 30yr fixed, then a couple months later I locked in to a 5.375 30yr fixed.

There is some calculators out there that can help you decide if it is worth refi’ing

[vizcaya]

Yeah, I purchased back when rates were 6.5 for a 30yr fixed, then a couple months later I locked in to a 5.375 30yr fixed.

There is some calculators out there that can help you decide if it is worth refi’ing

[donaldduckmoore]

Can I refi a house that I purchased a month or 2 ago? The contract does not have prepayment penalty though. Thanks.

[donaldduckmoore]

Can I refi a house that I purchased a month or 2 ago? The contract does not have prepayment penalty though. Thanks.

[donaldduckmoore]

Can I refi a house that I purchased a month or 2 ago? The contract does not have prepayment penalty though. Thanks.

[donaldduckmoore]

Can I refi a house that I purchased a month or 2 ago? The contract does not have prepayment penalty though. Thanks.

[NotCranky]

http://finance.yahoo.com/echarts?s=%5ETNX#symbol=%5ETNX;range=1d

[NotCranky]

http://finance.yahoo.com/echarts?s=%5ETNX#symbol=%5ETNX;range=1d

[NotCranky]

http://finance.yahoo.com/echarts?s=%5ETNX#symbol=%5ETNX;range=1d

[NotCranky]

http://finance.yahoo.com/echarts?s=%5ETNX#symbol=%5ETNX;range=1d

[SD Realtor]

Well said uco, I agree.

SD Realtor

[SD Realtor]

Well said uco, I agree.

SD Realtor

[SD Realtor]

Well said uco, I agree.

SD Realtor

[SD Realtor]

Well said uco, I agree.

SD Realtor

[ucodegen]

@SD Realtor

If you try to out think the market generally you lose. I am not saying you are incorrect. I am just trying to say that long long ago I gave up trying to apply my simplistic rational analysis. The marketplace is not controlled by common sense and visibility.

Common sense and visibility no, but it is predictable over the long term (ie. what we knew would happen for housing’s rapid price run-up). Over the short term, all bets are off. It is all manipulation and emotion.

[ucodegen]

@SD Realtor

If you try to out think the market generally you lose. I am not saying you are incorrect. I am just trying to say that long long ago I gave up trying to apply my simplistic rational analysis. The marketplace is not controlled by common sense and visibility.

Common sense and visibility no, but it is predictable over the long term (ie. what we knew would happen for housing’s rapid price run-up). Over the short term, all bets are off. It is all manipulation and emotion.

[ucodegen]

@SD Realtor

If you try to out think the market generally you lose. I am not saying you are incorrect. I am just trying to say that long long ago I gave up trying to apply my simplistic rational analysis. The marketplace is not controlled by common sense and visibility.

Common sense and visibility no, but it is predictable over the long term (ie. what we knew would happen for housing’s rapid price run-up). Over the short term, all bets are off. It is all manipulation and emotion.

[ucodegen]

@SD Realtor

If you try to out think the market generally you lose. I am not saying you are incorrect. I am just trying to say that long long ago I gave up trying to apply my simplistic rational analysis. The marketplace is not controlled by common sense and visibility.

Common sense and visibility no, but it is predictable over the long term (ie. what we knew would happen for housing’s rapid price run-up). Over the short term, all bets are off. It is all manipulation and emotion.

[SD Realtor]

That is the problem esmith. Common sense would dictate that the 10 year would not go down more because of your statement and other rationale. However common sense would have also dictated that in order to get our own financial mess in order we should have seen higher interest rates many years ago. How do we know that the there is not any behind the scenes nudging of purchasers both foreign and domestic of US debt.

If you try to out think the market generally you lose. I am not saying you are incorrect. I am just trying to say that long long ago I gave up trying to apply my simplistic rational analysis. The marketplace is not controlled by common sense and visibility. Unfortunately I believe it is much more controlled by other forces of which I and the general public have little to no control over. So all I can do is watch it, try to make money off of it and get the best deal I can off of it.

As I say there are many many who are well versed in the bond market and bond trading. You very well may be quite correct in your analysis. My stance is a bit more cautious which is, I have no clue where the bottom is, but someday it damn well has to go up… and farther into the future way up.

SD Realtor

[SD Realtor]

That is the problem esmith. Common sense would dictate that the 10 year would not go down more because of your statement and other rationale. However common sense would have also dictated that in order to get our own financial mess in order we should have seen higher interest rates many years ago. How do we know that the there is not any behind the scenes nudging of purchasers both foreign and domestic of US debt.

If you try to out think the market generally you lose. I am not saying you are incorrect. I am just trying to say that long long ago I gave up trying to apply my simplistic rational analysis. The marketplace is not controlled by common sense and visibility. Unfortunately I believe it is much more controlled by other forces of which I and the general public have little to no control over. So all I can do is watch it, try to make money off of it and get the best deal I can off of it.

As I say there are many many who are well versed in the bond market and bond trading. You very well may be quite correct in your analysis. My stance is a bit more cautious which is, I have no clue where the bottom is, but someday it damn well has to go up… and farther into the future way up.

SD Realtor

[SD Realtor]

That is the problem esmith. Common sense would dictate that the 10 year would not go down more because of your statement and other rationale. However common sense would have also dictated that in order to get our own financial mess in order we should have seen higher interest rates many years ago. How do we know that the there is not any behind the scenes nudging of purchasers both foreign and domestic of US debt.

If you try to out think the market generally you lose. I am not saying you are incorrect. I am just trying to say that long long ago I gave up trying to apply my simplistic rational analysis. The marketplace is not controlled by common sense and visibility. Unfortunately I believe it is much more controlled by other forces of which I and the general public have little to no control over. So all I can do is watch it, try to make money off of it and get the best deal I can off of it.

As I say there are many many who are well versed in the bond market and bond trading. You very well may be quite correct in your analysis. My stance is a bit more cautious which is, I have no clue where the bottom is, but someday it damn well has to go up… and farther into the future way up.

SD Realtor

[SD Realtor]

That is the problem esmith. Common sense would dictate that the 10 year would not go down more because of your statement and other rationale. However common sense would have also dictated that in order to get our own financial mess in order we should have seen higher interest rates many years ago. How do we know that the there is not any behind the scenes nudging of purchasers both foreign and domestic of US debt.

If you try to out think the market generally you lose. I am not saying you are incorrect. I am just trying to say that long long ago I gave up trying to apply my simplistic rational analysis. The marketplace is not controlled by common sense and visibility. Unfortunately I believe it is much more controlled by other forces of which I and the general public have little to no control over. So all I can do is watch it, try to make money off of it and get the best deal I can off of it.

As I say there are many many who are well versed in the bond market and bond trading. You very well may be quite correct in your analysis. My stance is a bit more cautious which is, I have no clue where the bottom is, but someday it damn well has to go up… and farther into the future way up.

SD Realtor

[Eugene]

The $64,000 question: how far can US 10-year treasury go when you can buy 10-year French Euro-denominated bonds yielding 4.5%?

[Eugene]

The $64,000 question: how far can US 10-year treasury go when you can buy 10-year French Euro-denominated bonds yielding 4.5%?

[Eugene]

The $64,000 question: how far can US 10-year treasury go when you can buy 10-year French Euro-denominated bonds yielding 4.5%?

[Eugene]

The $64,000 question: how far can US 10-year treasury go when you can buy 10-year French Euro-denominated bonds yielding 4.5%?

[SD Realtor]

Tough call man…greedy or smart… usually they do not go hand in hand…let’s just say you are trying to get the best rate possible and leave it at that.

Like I said, I am not expert on the bond market. That is where guys like Chris S and the experts come in. All I can tell you is to keep checking that 10 year treasury yield every day or more…

Sometimes the lenders have a 1 time rate adjustment but I take it the program you are looking at does not have that eh? That allows you to lock in BUT you also get a 1 time chance to relock during the escrow period.

SD Realtor

[SD Realtor]

Tough call man…greedy or smart… usually they do not go hand in hand…let’s just say you are trying to get the best rate possible and leave it at that.

Like I said, I am not expert on the bond market. That is where guys like Chris S and the experts come in. All I can tell you is to keep checking that 10 year treasury yield every day or more…

Sometimes the lenders have a 1 time rate adjustment but I take it the program you are looking at does not have that eh? That allows you to lock in BUT you also get a 1 time chance to relock during the escrow period.

SD Realtor

[SD Realtor]

Tough call man…greedy or smart… usually they do not go hand in hand…let’s just say you are trying to get the best rate possible and leave it at that.

Like I said, I am not expert on the bond market. That is where guys like Chris S and the experts come in. All I can tell you is to keep checking that 10 year treasury yield every day or more…

Sometimes the lenders have a 1 time rate adjustment but I take it the program you are looking at does not have that eh? That allows you to lock in BUT you also get a 1 time chance to relock during the escrow period.

SD Realtor

[SD Realtor]

Tough call man…greedy or smart… usually they do not go hand in hand…let’s just say you are trying to get the best rate possible and leave it at that.

Like I said, I am not expert on the bond market. That is where guys like Chris S and the experts come in. All I can tell you is to keep checking that 10 year treasury yield every day or more…

Sometimes the lenders have a 1 time rate adjustment but I take it the program you are looking at does not have that eh? That allows you to lock in BUT you also get a 1 time chance to relock during the escrow period.

SD Realtor

[kicksavedave]

Great thread and very timely info for me. I’m 60 days from closing on the new home near Denver. The builders lender has offered a 95% loan for 5.65% with the PMI built in and they will pay all the closing cost. They want me to lock that in but I see little to no upside in doing that right now, only downside with the 10 and 30 T’s yields plummeting. I’m going to let it ride in hopes that another 1/4 point or more drop in the next 60 days materializes.

Am I being greedy, or smart?

[kicksavedave]

Great thread and very timely info for me. I’m 60 days from closing on the new home near Denver. The builders lender has offered a 95% loan for 5.65% with the PMI built in and they will pay all the closing cost. They want me to lock that in but I see little to no upside in doing that right now, only downside with the 10 and 30 T’s yields plummeting. I’m going to let it ride in hopes that another 1/4 point or more drop in the next 60 days materializes.

Am I being greedy, or smart?

[kicksavedave]

Great thread and very timely info for me. I’m 60 days from closing on the new home near Denver. The builders lender has offered a 95% loan for 5.65% with the PMI built in and they will pay all the closing cost. They want me to lock that in but I see little to no upside in doing that right now, only downside with the 10 and 30 T’s yields plummeting. I’m going to let it ride in hopes that another 1/4 point or more drop in the next 60 days materializes.

Am I being greedy, or smart?

[kicksavedave]

Great thread and very timely info for me. I’m 60 days from closing on the new home near Denver. The builders lender has offered a 95% loan for 5.65% with the PMI built in and they will pay all the closing cost. They want me to lock that in but I see little to no upside in doing that right now, only downside with the 10 and 30 T’s yields plummeting. I’m going to let it ride in hopes that another 1/4 point or more drop in the next 60 days materializes.

Am I being greedy, or smart?

[SD Realtor]

Guys –

HLS or Pasadena broker and mortgage professionals have more expert takes then I do. With that said long term mortgages have ALWAYS trended in the same direction of the 10/30 year treasury yields. The risk premium that is built in by the originators will fluctuate based on many factors but mostly on the secondary market. When we saw the secondary market lockup in August, that risk premium jumped way up. However memories are short and it went down after several weeks. Obviously the risk premium for a conforming loan that is FHA approved is the lowest. The premiums go up with jumbos, etc…

Now how low will rates go? Don’t know and don’t have a clue. Will they TREND in the same direction as the long term treasury yield? Absolutely. Will the risk premiums vary? Absolutely.

Your mission then is to find the best time, that is when the 10 or 30 year treasury yield is low AND the risk premium is low. Since you do not have much knowledge of the risk premium all you can do is monitor the 10 year.

Of course there is continuing bad news about foreclosures but for people to think mortgage rates will not budge while the 10 year yield plummets is not realistic.

Finally, long term rates do not just move lock step with the 10 year. As any shmuck in life knows, you get screwed on the way down and double screwed on the way up. In other words, lenders are sticky on the way down and they will not lower rates immediately even though the 10 year may go down. They may wait a day or a few days to make sure it doesnt spike back up, then they will lower them. Also many times one will not lower a rate until the other does, then they all do at once. Of course the SECOND the yield moves back up they all raise rates up immediately.

SD Realtor

[SD Realtor]

Guys –

HLS or Pasadena broker and mortgage professionals have more expert takes then I do. With that said long term mortgages have ALWAYS trended in the same direction of the 10/30 year treasury yields. The risk premium that is built in by the originators will fluctuate based on many factors but mostly on the secondary market. When we saw the secondary market lockup in August, that risk premium jumped way up. However memories are short and it went down after several weeks. Obviously the risk premium for a conforming loan that is FHA approved is the lowest. The premiums go up with jumbos, etc…

Now how low will rates go? Don’t know and don’t have a clue. Will they TREND in the same direction as the long term treasury yield? Absolutely. Will the risk premiums vary? Absolutely.

Your mission then is to find the best time, that is when the 10 or 30 year treasury yield is low AND the risk premium is low. Since you do not have much knowledge of the risk premium all you can do is monitor the 10 year.

Of course there is continuing bad news about foreclosures but for people to think mortgage rates will not budge while the 10 year yield plummets is not realistic.

Finally, long term rates do not just move lock step with the 10 year. As any shmuck in life knows, you get screwed on the way down and double screwed on the way up. In other words, lenders are sticky on the way down and they will not lower rates immediately even though the 10 year may go down. They may wait a day or a few days to make sure it doesnt spike back up, then they will lower them. Also many times one will not lower a rate until the other does, then they all do at once. Of course the SECOND the yield moves back up they all raise rates up immediately.

SD Realtor

[SD Realtor]

Guys –

HLS or Pasadena broker and mortgage professionals have more expert takes then I do. With that said long term mortgages have ALWAYS trended in the same direction of the 10/30 year treasury yields. The risk premium that is built in by the originators will fluctuate based on many factors but mostly on the secondary market. When we saw the secondary market lockup in August, that risk premium jumped way up. However memories are short and it went down after several weeks. Obviously the risk premium for a conforming loan that is FHA approved is the lowest. The premiums go up with jumbos, etc…

Now how low will rates go? Don’t know and don’t have a clue. Will they TREND in the same direction as the long term treasury yield? Absolutely. Will the risk premiums vary? Absolutely.

Your mission then is to find the best time, that is when the 10 or 30 year treasury yield is low AND the risk premium is low. Since you do not have much knowledge of the risk premium all you can do is monitor the 10 year.

Of course there is continuing bad news about foreclosures but for people to think mortgage rates will not budge while the 10 year yield plummets is not realistic.

Finally, long term rates do not just move lock step with the 10 year. As any shmuck in life knows, you get screwed on the way down and double screwed on the way up. In other words, lenders are sticky on the way down and they will not lower rates immediately even though the 10 year may go down. They may wait a day or a few days to make sure it doesnt spike back up, then they will lower them. Also many times one will not lower a rate until the other does, then they all do at once. Of course the SECOND the yield moves back up they all raise rates up immediately.

SD Realtor

[SD Realtor]

Guys –

HLS or Pasadena broker and mortgage professionals have more expert takes then I do. With that said long term mortgages have ALWAYS trended in the same direction of the 10/30 year treasury yields. The risk premium that is built in by the originators will fluctuate based on many factors but mostly on the secondary market. When we saw the secondary market lockup in August, that risk premium jumped way up. However memories are short and it went down after several weeks. Obviously the risk premium for a conforming loan that is FHA approved is the lowest. The premiums go up with jumbos, etc…

Now how low will rates go? Don’t know and don’t have a clue. Will they TREND in the same direction as the long term treasury yield? Absolutely. Will the risk premiums vary? Absolutely.

Your mission then is to find the best time, that is when the 10 or 30 year treasury yield is low AND the risk premium is low. Since you do not have much knowledge of the risk premium all you can do is monitor the 10 year.

Of course there is continuing bad news about foreclosures but for people to think mortgage rates will not budge while the 10 year yield plummets is not realistic.

Finally, long term rates do not just move lock step with the 10 year. As any shmuck in life knows, you get screwed on the way down and double screwed on the way up. In other words, lenders are sticky on the way down and they will not lower rates immediately even though the 10 year may go down. They may wait a day or a few days to make sure it doesnt spike back up, then they will lower them. Also many times one will not lower a rate until the other does, then they all do at once. Of course the SECOND the yield moves back up they all raise rates up immediately.

SD Realtor

[cashflow]

Hi SD R,

I’m watching this closely as well as we want to refi our rental home. I noticed on Bankrate that usually I would get up to 10 different quotes, now I’m only seeing about 5 come up for this area….do you think this is due to the credit crunch, just not as many willing to finance in this region?? Mortgage Capital Assoc. usually had lower rates and quote a reasonable fee, they are at 5.1% today…not too bad…

What are your thoughts on how low this could go? I’m excited to get this done though and long term have a great rate and save some $$$. On the flipside, we too had a CD resetting, but it locked in beggining of month, still not too good though.

Can’t have it all!

[cashflow]

Hi SD R,

I’m watching this closely as well as we want to refi our rental home. I noticed on Bankrate that usually I would get up to 10 different quotes, now I’m only seeing about 5 come up for this area….do you think this is due to the credit crunch, just not as many willing to finance in this region?? Mortgage Capital Assoc. usually had lower rates and quote a reasonable fee, they are at 5.1% today…not too bad…

What are your thoughts on how low this could go? I’m excited to get this done though and long term have a great rate and save some $$$. On the flipside, we too had a CD resetting, but it locked in beggining of month, still not too good though.

Can’t have it all!

[cashflow]

Hi SD R,

I’m watching this closely as well as we want to refi our rental home. I noticed on Bankrate that usually I would get up to 10 different quotes, now I’m only seeing about 5 come up for this area….do you think this is due to the credit crunch, just not as many willing to finance in this region?? Mortgage Capital Assoc. usually had lower rates and quote a reasonable fee, they are at 5.1% today…not too bad…

What are your thoughts on how low this could go? I’m excited to get this done though and long term have a great rate and save some $$$. On the flipside, we too had a CD resetting, but it locked in beggining of month, still not too good though.

Can’t have it all!

[cashflow]

Hi SD R,

I’m watching this closely as well as we want to refi our rental home. I noticed on Bankrate that usually I would get up to 10 different quotes, now I’m only seeing about 5 come up for this area….do you think this is due to the credit crunch, just not as many willing to finance in this region?? Mortgage Capital Assoc. usually had lower rates and quote a reasonable fee, they are at 5.1% today…not too bad…

What are your thoughts on how low this could go? I’m excited to get this done though and long term have a great rate and save some $$$. On the flipside, we too had a CD resetting, but it locked in beggining of month, still not too good though.

Can’t have it all!

[Fearful]

I can understand funds flowing to 10yr from the stock market.

However, I cannot understand funds flowing in to mortgages.

Anybody that can help me understand why mortgage rates have been going down lately?

[Eugene]

Because so far delinquency/default rates of fixed rate mortgages were negligible. As far as investors are concerned, housing problems are still confined to subprime and adjustable-rate markets.

[Fearful]

Sounds reasonable; also, Fannie does not do a good job of assessing default risk when buying mortgages.

Jumbos have come down, too, though not as much as conforming.

[Fearful]

Sounds reasonable; also, Fannie does not do a good job of assessing default risk when buying mortgages.

Jumbos have come down, too, though not as much as conforming.

[Fearful]

Sounds reasonable; also, Fannie does not do a good job of assessing default risk when buying mortgages.

Jumbos have come down, too, though not as much as conforming.

[Fearful]

Sounds reasonable; also, Fannie does not do a good job of assessing default risk when buying mortgages.

Jumbos have come down, too, though not as much as conforming.

[Fearful]

Sounds reasonable; also, Fannie does not do a good job of assessing default risk when buying mortgages.

Jumbos have come down, too, though not as much as conforming.

[Eugene]

Because so far delinquency/default rates of fixed rate mortgages were negligible. As far as investors are concerned, housing problems are still confined to subprime and adjustable-rate markets.

[Eugene]

Because so far delinquency/default rates of fixed rate mortgages were negligible. As far as investors are concerned, housing problems are still confined to subprime and adjustable-rate markets.

[Eugene]

Because so far delinquency/default rates of fixed rate mortgages were negligible. As far as investors are concerned, housing problems are still confined to subprime and adjustable-rate markets.

[Eugene]

Because so far delinquency/default rates of fixed rate mortgages were negligible. As far as investors are concerned, housing problems are still confined to subprime and adjustable-rate markets.

[Fearful]

I can understand funds flowing to 10yr from the stock market.

However, I cannot understand funds flowing in to mortgages.

Anybody that can help me understand why mortgage rates have been going down lately?

[Fearful]

I can understand funds flowing to 10yr from the stock market.

However, I cannot understand funds flowing in to mortgages.

Anybody that can help me understand why mortgage rates have been going down lately?

[Fearful]

I can understand funds flowing to 10yr from the stock market.

However, I cannot understand funds flowing in to mortgages.

Anybody that can help me understand why mortgage rates have been going down lately?

[Fearful]

I can understand funds flowing to 10yr from the stock market.

However, I cannot understand funds flowing in to mortgages.

Anybody that can help me understand why mortgage rates have been going down lately?

[gdcox]

The 10 year yield is acting like gold at this time. It is a bellweather to to bad times in the sense that the more gloom the more it will fall; even at today’s levels. However, since many are now calling for the worst of the crisis to be coming to an end (ie over the hump of the chart of shocks) , there is more of a symmetric risk : ie there is a real chance of less pessimism leading to a higher ten year rate. So we may be near to bottom for ten year yields.

[gdcox]

The 10 year yield is acting like gold at this time. It is a bellweather to to bad times in the sense that the more gloom the more it will fall; even at today’s levels. However, since many are now calling for the worst of the crisis to be coming to an end (ie over the hump of the chart of shocks) , there is more of a symmetric risk : ie there is a real chance of less pessimism leading to a higher ten year rate. So we may be near to bottom for ten year yields.

[gdcox]

The 10 year yield is acting like gold at this time. It is a bellweather to to bad times in the sense that the more gloom the more it will fall; even at today’s levels. However, since many are now calling for the worst of the crisis to be coming to an end (ie over the hump of the chart of shocks) , there is more of a symmetric risk : ie there is a real chance of less pessimism leading to a higher ten year rate. So we may be near to bottom for ten year yields.

[gdcox]

The 10 year yield is acting like gold at this time. It is a bellweather to to bad times in the sense that the more gloom the more it will fall; even at today’s levels. However, since many are now calling for the worst of the crisis to be coming to an end (ie over the hump of the chart of shocks) , there is more of a symmetric risk : ie there is a real chance of less pessimism leading to a higher ten year rate. So we may be near to bottom for ten year yields.

[gdcox]

The 10 year yield is acting like gold at this time. It is a bellweather to to bad times in the sense that the more gloom the more it will fall; even at today’s levels. However, since many are now calling for the worst of the crisis to be coming to an end (ie over the hump of the chart of shocks) , there is more of a symmetric risk : ie there is a real chance of less pessimism leading to a higher ten year rate. So we may be near to bottom for ten year yields.

[Author]

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