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Mortgage Rates: Hovering Near All-Time Lows

Borrowing costs improved once again today. Mortgage rates are hovering near all-time lows.

Though many lenders have greatly improved their consumer rate quotes overthe past two weeks, we must point out an increased amount of volatility in whatindividual lenders are now quoting as their Best Execution rates. This is a factor of price volatility in the secondary mortgagemarket. Unfortunately when volatility picks up in the secondarymortgage market, the cost of doing business gets more expensive for lenders(hedging costs go up). Those added costs are usually passed down to consumersvia extra margin in rate sheets. These costs are unavoidable. The best thingfor mortgage rates right now is stability. Additionally, some lenders have beenadjusting their loan pricing strategies to better control the flow of new loanoriginations. To put it more simply, some lenders are busier than othersand can't take-in anymore business, so they've pushed rates higher to encourageconsumers to either wait it out or find another lender before rates rise.

CURRENT MARKET*: The Best Execution 30-year fixed mortgagerate has fallen to 4.125%. Several lenders are willing to offer 4.000%and even 3.875% is possible for those interested in buying down their rate. 4.250% is widely-available. On FHA/VA 30 year fixed Best Execution is4.000%, but 3.875 and even 3.750 are available with additional closingcosts. 15 year fixed conventional loans are best priced at 3.625% butwe're seeing aggressive quotes as low as 3.375%. Five year ARMs are still bestpriced at 3.25. ARMs seem to have bottomed out.