9 July 2009 ? The 30-year fixed mortgage rates have really made a nice run over the past 4 weeks. Yesterday the mortgage bonds finished up 66bps, which is a very nice gain. The bonds were helped by a successful 10 Year Note Auction. Today we anticipated the bonds to open up lower as they have had a tremendous rally and as predicted the mortgage bonds opened up down 44bps. However with the nice gain yesterday we finally have broken through the 5% mortgage rate and some highly qualified buyers will be able to secure the 30 year fixed rate at 4.875% (assumptions – $417,000 loan amount, 740+ credit score, Single Family Home). The rates are now firm and holding at the 5% to 5.125% for most other consumers. The mortgage bonds are trying to rally a bit and are currently down 16, which is a gain of 28bps . I believe we will see some volatility here today and tomorrow while certain levels of resistance are tested. The Dow is down 16 after opening up in the positive the market has retreated. This economic recovery will certainly take time to recover, just as it took time to develop.

One note to consumers who are looking at mortgage rates, the loan amount that you are shopping is very important?mortgage rates tend to be higher for loan amounts that are less than $175,000. Also, make sure you understand the assumptions when a lender gives you a rate; most banks tend to assume a 1 point fee when posting their mortgage rates. Here in the Midwest it’s not typical to pay points. Comparing rates with 1 point or no points is an excellent idea for all consumers.

Again, for first-time buyers or consumers who are looking for a very good rate, the 10/1 Arm is currently at 4.375%. This is an excellent product and has relatively low risk due to the length before the loan would ever adjust.