Mortgage rates were almost perfectly unchanged over the weekend.  Most lenders are still right in line with Friday’s most prevalently-quoted conforming 30yr fixed rate of 4.0% for top tier borrowers.  That said, most of those rate sheets also still have reasonable costs for borrowers interested in paying more upfront for a lower rate.  For instance, the time required to break even on additional upfront costs is roughly 5 years when moving down from 4.0 to 3.875% or 3.75%, depending on the lender.

Today was uneventful in terms of movement in the markets that underlie mortgage rate changes.  The rest of the week, however, stands a good chance to be increasingly volatile.  Wednesday afternoon’s Fed Announcement is the main event in that regard.  The Fed is widely expected to confirm the end of the asset purchases associated with its 3rd round of quantitative easing (QE3).  While that won’t be a surprise if it happens, it will require additional verbiage changes in a statement that hasn’t been forced to undergo any meaningful changes in months.

Loan Originator Perspective

“We had a decent start to a potentially interesting week today. Both MBS and treasuries improved slightly, and my rate sheets look marginally better than Friday’s. The gorilla in the room is Wednesday’s Fed statement and the presumed end of QE3. Floating borrowers need nerves of steel in situations like this, and those choosing to float will want to have their loan officers on speed dial Wednesday afternoon when the Fed statement is released.” –Ted Rood, Senior Loan Originator

“Wednesday’s FOMC Announcement can, of course, send markets flying in either direction.  This creates a need to be a bit more defensive for loans closing within 15 days.  That said, we’ve seen rates move quite a bit higher since recent lows, thus leaving some room for optimism as long as you’re ready to lock quickly if the market is moving against you. ” –Constantine Floropoulos, Quontic Bank

Floating into the Fed statement makes the most sense.  If rates are able to improve ahead of it, you can take advantage of the better pricing should the market reverse upon release of the statement. Should bonds advance after the statement you will be able to continue to float and wait for better pricing.” –Manny Gomes, Branch Manager Norcom Mortgage

Today’s Best-Execution Rates

• 30YR FIXED – 4.0
  
• FHA/VA – 3.5
• 15 YEAR FIXED –  3.25
• 5 YEAR ARMS –  3.0 – 3.50% depending on the lender