The bond market finally capitulated slightly this week giving mortgage rates a little relief after 4 weeks of extreme volatility.  Rates lowered by about .25% overall.  One thing that seems to have happened in the last 2 weeks is the shrinking of available loan programs.  In the conforming or “agency” loan universe (loans purchased by Freddie Mac and Fannie Mae),  It would seem the only loan that makes any sense right now is a 15 or 30 year fixed rate.  Adjustable rate mortgages are the same rate or even higher than those of fixed rates right now, so why bother even considering them?

The agencies have increased their pricing premiums for “interest only” features, to the point where the payment savings is virtually nothing… again, why even consider it if the payment is the same?

There is one European “portfolio” lender right now that I know still has some aggressive 5 and 7 year ARM pricing WITH interest only as well.  I hope they stick around.

When markets closed on Friday most banks were pricing their fixed rate mortgages between 6.25% and 6.5%.

Related posts:

1. Mortgage Rate Update - October 24
2. Mortgage Rate Update November 7, 2008
3. Finding the Right Mortgage for Your Home Purchase
4. The Jumbo Loan Market
5. Mortgage Market Guide for Week of March 24

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