As we are drawing close to the holiday season, mortgage rates were found to be slightly lower. In spite of the decline in the prices, nonetheless, there are no indications regarding improvements in MBS or mortgage-backed securities. Although the group is in charge of setting the price of mortgages and determining market average regularly, its relationship with the figures is not always on a level playing field.
For such periodic disconnections in mortgages, shortened trading sessions related to the holiday happen prime time. Parties, especially top tier borrowers and those with 30-year fixed rates or 15-year fixed rates, are affected. Thus, during the said time, lending authorities tend to delay submissions pricing adjustment reports.
Looking at Better Rates
However, regardless of headwinds, along with other factors that hinder development, mortgage rates have begun swaying in favor of the lenders. Since October 15, price movements have become predictable and have seemed to be at their best, which is a new trend for around 18 months.
Consequently, numerous lenders have reported to regret decisions of not locking mortgages during that period. In fact, the same people have remained a while in case of an opportunity to bounce right back to lows that never seem to materialize. They would cross their fingers in the hope of gaining more profit with their arranged proposals.
Contrary to these lenders’ claims, however, getting back to lows proved the right idea, as anybody observing price movements could attest. Had they only waited for almost 2 months, they could have been offered their preferred price. On one hand, the trend makes way for a higher chance of getting a set rate. On the other hand, it suggests that lows recorded to have been at a steady level for a long time should not be taken for granted.
Bang for the Buck vs. Outright Price
While advantages and special deals are associated with bang for the buck rates, some prefer mortgage proposals with outright prices. According to them, they are somehow on a safe field with set figures, regardless of crises or any future changes. Since the market is volatile, it seems to benefit more from fixed arrangements. With both cases, however, the final price would depend on the lender and on specific factors that could affect market value.
Mortgage Rate Trends
To paraphrase what a Seacoast Bank employee said, basing on mortgage rate trends is helpful. If one can remain under 2.2 on the 10-year fixed rate, the holiday would appear to be generous to him. In the event prices were to stay still for a series of weeks, they are likely to be near that amount for the incoming days. Although floating may appear to be a safe option with figures continuing to decline, he should think otherwise. Especially if his closing is within the 15-day period, locking in some gains seems the practical move.
Locking & Floating Considerations
There has been a narrow range regarding the market average of mortgages in the hallmark of 2014. They have become predictable but are, also, rather unstable. Since many market participants would bet on prices going up, the market, itself, has punished the imbalance with a downhill movement.
In fact, the European market has been open in showing its support for the market. As observed, it wants to stand in the way of the rise in prices. Furthermore, it has continued to play a prominent part in keeping US mortgages relatively low.
For months, particularly in the summer and early fall of 2014, mortgage rates held a narrow range with a 0.125% difference in market average. Although they have bottomed out in the middle of October, the figures have slowly gone back up as November came. However, once again, they have plummeted to the ground when December began.