September 8, 2010
September 8, 2010 by admin
The stock market rebounded following Tuesday’s major sell off as investors moved back into equities on Wednesday. The markets move up is a bit puzzling as there was limited economic data on Wednesday aside from a report that European debt was begging to become less problematic for the market. A new report from the Federal Reserve was much more pessimistic on the growth of the U.S. economy and confirmed yet again that the likelyhood for a double dip recession is increasing.
Treasury yields moved up past 2.65% on Wednesday, pressuring fixed rate mortgage loans for thirty year loan terms to cross back over 4.5% with major lenders. A few online lenders were offering thirty year mortgage loans below four percent (3.99%). This loan program would give a borrower a fixed mortgage rate for thirty years under four percent, but also carries significant upfront closing costs (discount points) in order to secure the below market interest rate. This type of loan is more beneficial to borrowers who plan to make a long term commitment, likely over 5-7 years in there present home and could potentially lead to savings in the tens of thousands of dollars over a thirty year loan period. A good loan advisor should be able to break down the cost, potential savings over 30 years, break even point and even the potential tax savings for paying the discount points. September mortgage rates continue moving higher, but remain at very attractive levels for both refinance and purchase customers.
