Mortgage Backed Securities

Mortgage Money is still readily available!

There was a nice improvement in MBS (Mortgage Backed Securities) last week. Rates are directly impacted by the trading of MBS coupons, which is why we saw rates improve throughout the week. This could be a continuing trend in the very near term, but beware of the pressures on this market. Much of the market improvement was due to the Fed purchasing of MBS, which they have stated they are winding down.

What this means to you as a borrower is this. If you are purchasing a new home and have an executed contract right now, I would recommend locking in your rate. The small dips you might encounter over the next week or so, will not be worth the risk of having a severe market move and being off .250% to .500% in rate.  Remember that the market moves negatively very fast and the recovery is a much longer process.

If you are in the process of refinancing, have your loan underwritten and approved.  If you want to cautiously float, have your loan ready to close so your loan officer can take advantage of the lowest lock term possible which will help give you the best pricing possible.  With that said, trying to pick the bottom of a market is very difficult to do, and too many times this strategy ends up as a missed opportunity.

There is a lot of data being released this week which will have an impact on rates.  Stay tuned here for all the news.

If you have any questions about how this may effect you personally, please feel free to contact me or any member of the Get Home Denver Team.

Thanks go out to Trevor Gallup with Union National Mortgage Company for this information.