Take A Look Below At Rates!!

Posted By: Jon Tobias, Nova Home Loans

Mortgage bond prices rose last week pushing mortgage interest rates lower. Trading remained volatile with wild swings in both stocks and bonds. The economic data released was within the estimated range and indicated the US economy continues to weaken. The meeting on Tuesday of the Federal Open Market Committee will be the most important event this coming week. Look for rates to be potentially volatile Monday as traders position themselves ahead of Tuesday's meeting.

All eyes will be focused on the Fed meeting next Tuesday. Most analysts predict another rate cut as the economy continues to struggle. As of trading late last week, futures contracts showed a greater than 80% chance of a 75 basis point cut.

The United States central bank, the Federal Reserve, coordinates the borrowing and lending activities of federally chartered banks. The principal reason the Federal Reserve was created was to reduce severe financial crises. One way of accomplishing this goal is to control the amount of money that flows through the economy. By manipulating the US money supply, the Fed influences inflation, unemployment, and the level of US economic activity. The Fed has a variety of tools that it uses to control the money supply, but its chief policy tool is the manipulation of short-term interest rates.

Keep in mind that a Fed rate cut does not automatically mean mortgage interest rates will improve. The Federal Reserve has direct control over the level of short-term interest rates. The Fed's influence over longer-term interest rates with rate cuts is less certain. However, the unprecedented recent direct purchasing of mortgage bonds is a strong effort to push longer-term rates lower as well.
Remember, rates are historically favorable. While there is a strong possibility rates could improve, there are no guarantees in these uncertain times. As a reminder, just a few months ago analysts overwhelmingly predicted gas prices would continue to rise.
If you have any questions over the weekend or need a 2nd opinion on a loan scenario, please call my mobile at 480-225-2987 or go straight to www.creativefinanceaz.com for urgent care files.

Rates for December 12th, 2008 Rates Change Daily. Call for current pricing. #0902429
PROGRAM / LOCK PERIOD
30 Year Fixed Conventional 4.875%, 4.988%APR
30 Year Fixed Interest Only 5.875%, 5.945%APR
15 Year Fixed Conventional 4.75%, 4.863%APR
3/1 LIBOR ARM Conventional 5.375%, 5.456%APR
5/1 LIBOR ARM Conventional 5.375%, 5.488%APR
5/1 LIBOR ARM Interest Only 5.50%, 5.613%APR
30 Year FHA/VA 5.50%, 5.726%APR
*30 Day Locks

JUMBO $417,001+
30 Year Fixed (to $600K) 5.875%, 5.976%APR
15 Year Fixed (to $600K) 5.875%, 5.976%APR
5/1 Treasury ARM 5.50%, 5.601%APR
7/1 Treasury ARM 5.625%, 5.726%APR
*30 Day Locks

ONE-TIME CONSTRUCTION
Conforming & Jumbo (to $8,000,000)
30 Year Fixed Conventional 6.375%, 6.882%APR
5/1 LIBOR ARM (Jumbo) 6.75%, 7.257%APR
*60 Day Locks

6,9,12, and 24 month construction phases available. Construction phase interest only rate = PRIME (5%) + up to 1.25%. Perm. rates guaranteed through construction.Prior to modification, a free one-time float down is available. (30 Year Amortization)
Rates are calculated based on no discount points and one origination fee. Conforming rates based on loan amounts greater than $200,000, minimum FICO score 720.