As a San Diego Realtor watching San Diego home mortgage rates, it seemed to me that they had actually increased after the 1/2 percent Fed rate cut. To confirm this, I contacted one of San Diego's largest home mortgage lenders. Here is his reply:
Please note that mortgage rates are very VERY individualized, now more than ever. Rates vary based on down payment, FICO score, type of property, and other factors. With that in mind, the "benchmark" that many people use to determine "rates" on a given day is the best rate available for a 30 year fixed rate "conforming" loan. This is a loan amount of up to $417,000 meaning that it is saleable to FNMA or FHLMC.
As you requested, I have priced out the 30 year fixed rate loans for 3 days September 11th (one week before the fed rate cut) September 18th (the day of the fed rate cut) September 25th (one week after the fed rate cut).
You can pretty clearly see that mortgage rates (in anticipation of a rate cut) had already factored Fed action into the pricing models used on September 11th.
Yes, it is true that rates are now actually HIGHER than they were prior to the fed rate cut. Here is the info.. 10 year treasury bond (closing price)
September 11th 4.36%
September 18th 4.48%
September 25th 4.60%
30 year fixed rate mortgages that we offered to our BEST customer on a fully documented loan on the same 3 dates
September 11th 6.00% at a cost of 1 point
September 18th 6.125% at a cost of 1 point
September 25th 6.25% at a cost of 1 point
As always, customers can always choose to take a higher rate for a lower cost, or to pay more points to get a lower interest rate. Ed. note: To contact this San Diego mortgage lender, send me an email. San Diego real estate brokers
Wednesday, October 10, 2007
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