Kansas City Real Estate Overland Park Homes

I’m locking mortgage rates at application for all loan types, regardless of closing date.  I’ve been recommending locks for three weeks.  Rates improved about .375% so I was incorrect.  Why then, should you heed my advice now?  Let’s look at this chart:

This chart is pricing for the last 30 days for mortgage-backed securities.  When MBS prices go up, mortgage rates come down.  In this case, I noticed a meteoric rise in MBS prices in the last week in April (off a low of 99.5).  I called for clients to lock on May 2, 2008, when the 30 year fixed rate mortgage was at 5.875%.  Today, it has improved to 5.875%

MBS prices improved to 100.75, then retreated to 99.75.  I was locking as prices improved to 100.75 again (rates lowered).  They closed down today at 100.62.  If they retreat below 99.75, we could see a 6.0% 30 year fixed rate mortgage.

Lock all loans.  I’m more about not losing money rather than making money when I analyze execution.  I think the risk of higher rates, in the next few weeks, is greater than any chance of lower rates.

Kansas City Spring Homes Tour

We know its spring time when the Home Builders Association puts on their annual spring home tour in Kansas City!  It’s always so wonderful to look at the new decorating ideas & to see the wonderful homes for sale in Kansas City along with the new trends.  This is their 46^th annual parade, with over 320 homes available to view between the hours of 11am & 6 pm. The homes are scattered around the eight counties surrounding Kansas City. Homes for sale in Kansas City that are on the Parade of Homes Tour range from $100,000 to $2.6 million.  You’ll have the chance to view the American Dream Award, which are held in conjunction with the Parade of Homes.  The homes that are entered compete in categories determined by price, housing styles, & I believe energy efficiency.

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Mortgage rates dropped, then rose to their original level, last week.  I’ve been advising  mortgage borrowers to lock all rates at application, regardless of closing date.  Did I miss an opportunity to improve clients’ rates?  I don’t think so.  My approach is more one of limiting losses than improving gains and last week, I thought there was a threat of higher mortgage rates; I still do.

Inflation data is released Wednesday and Unemployment data is due out Thursday.  These two figures could be the tempest in the teapot and really affect mortgage rates.  We just think there is too much risk to be floating (holding out for a better rate).  If markets overreact (and they usually do) we’ll change that recommendation but for now, we think it’s prudent to lock your mortgage rates.

Currently, the 5/1 ARM offers the best value at 4.875% wholesale rate.  The 30 year fixed rate loan is 5.875% wholesale rate.  While there is risk in losing the rate after 5 years, most borrowers don’t hold a mortgage that long.  If you are thinking of moving in the next few years, it would be well to examine the benefits of refinancing your home loan to a low 5/1 ARM rate.

Contact me at (858)-777-9751 with more questions.