Market Conditions in Idaho>Question Details

Chris Fischer, Home Buyer in Idaho

What is the opinion on the direction of interest rates for a 30 refinance loan over the next 30 days.?

Asked by Chris Fischer, Idaho Thu Feb 19, 2009

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Don't think of it as much as what is the rate but more like what do you want the rate to be. Right now, interest rates are very closely lumped together - meaning that there is not much of a difference from rate to rate when it comes to price, rebate, etc. It used to be that paying a discount of about 1% dropped your rate about .5% - now 1% in discount can drop it over 1%.

Right now, the lowest rate I see where the discount fee does not get excessive is 4.875%, which costs about 1 discount point or so as of today. If that is the rate you want, then register for it and if rates drop, the discount fee should be reduced. That is probably a better way to play the game sicne you never jeopardize the rate, you just gamble on the closing costs.

If I can be of any help, please let me know.
Luke Allison
Flagstar Bank

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0 votes Thank Flag Link Thu Feb 19, 2009

You run a risk either way. There is not sure fire way of determining what the mortgage market is going to do from one day to the next. You should consult with your lender and see what lock options they have available. Some will allow you to lock in but also reset if interest rates lower. Ultimately there's not a lot of room for them to dip much lower but plenty of room for them to go up.
0 votes Thank Flag Link Thu Feb 19, 2009
If you can lock in a good rate my advice is do it. Too much can happen over the course of 30 days to send rates up or down. My gut feeling is that Obama's mortgage aid plan, while it will help homeowners in tough situations refinance or modify their loans, is going to result in higher rates for the rest of the general population.

When a customer asks me whether they should lock in a rate now or wait, I ask them this question: which situation would upset you more - if you locked in a rate and rates went down 1/2% the following week or if you chose not to lock in and rates went up 1/2%?

Just one humble mortgage guy's opinion...
0 votes Thank Flag Link Thu Feb 19, 2009
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