Is 5.25% a low enough rate to get you off the fence?

More disappointing economic news is pushing mortgage rates even lower as investors seek the safety of bonds.   I typically wait to post rates until Friday, however since rates are at their lowest of the year, I'm making an exception!

30 Year Fixed Rate:  5.250% (APR 5.396%).    This rate is based on a sales price of $500,000/loan amount of $400,000 (20% down) with mid credit scores of 680 or better and a "full doc" loan.   There are no prepayment penalties.   This is priced with a 1% origination/discount fee.

Recently someone emailed me regarding my rate quotes.  He was interested in a cash out refi and wanted the loan priced with zero points.  He was surprised when the good faith estimate I provided him was not the rate I posted on my blog.  Here are some factors that can impact how a rate for a 30 year fixed is priced:

• Purchase, Rate/Term Refi or Cash-out Refi (note:  refinancing a non-purchase money second mortgage is considered a cash out refi)
• Credit Scores
• Loan to Value
• Loan amount
• Level of documentation (full, reduced, stated, etc).
• Points
• Escrow reserve account (having taxes and insurance included in your payment).
• Occupancy (investment property).
• Prepayment Penalties
• Lock period

Of course special programs will also impact pricing.  This is just an example of a basic 30 year fixed pricing factors.

5.25% won't last.   We may see profit taking with the stock market so sharply down.    When this happens, traders pull money out of bonds to buy stocks and thus mortgage rates increase. And we have the CPI (Consumer Price Index) being released tomorrow (an indicator of inflation) which may greatly impact mortgage rates.  Another factor that may bring rates up is if and when the Fed drops their rates.   There is all ready speculation the Fed may take action before their scheduled meeting at the end of this month.

As always, I advise locking.