May 29th, 2013 7:10 PM by Preston Ware
Interest Rates have definitely been in the wrong direction in the last three weeks or so. Our bond markets have suddenly become sensitive to any anything positive or negative and we are seeing wild fluctuations in volume and pricing.
Do I think rates will come back in the long term, Yes, but what is the long term? For me the long term is next month or up until the end of the year. Then, at that time, the powers that be may decide to stop purchasing American mortgage backed securities if our economy is strong enough.
(We will see)
Regardless if rates have jumped there still may be a benefit to your loan, especially if you are shortening the term of the loan. Those rates are still down in the lowest of 3's. Freddie Mac in it's May 23rd new letter reported that 3 out of every 10 refinances were shortening the term refinances and most average quotes .7 of a percent origination fee on top of underwriting and processing fees.
That is actually a substantial difference when you are comparing rates. I normally quote a no point rate and not a .7/10's of a percent origination fee rate on top of processing fees and underwriting fees rate.