Last week ended on a very brutal note for interest rates. The Fannie Mae (FNMA) 4.5%coupon has now stopped being the primary benchmark for mortgage rates. That title now belongs to the FNMA 5.0% coupon.
When I use the term "coupon" that just means a tranche of loans that are bundled together and sold on the secondary market. This bundling of loans and the price they sell at determines the interest rates available for people buying and refinancing homes.
What does it mean that the 5.0% coupon is now reigning supreme? It means goodbye interest rates in the upper 4% range on thirty year notes. Your best execution (combination of rate and fees, usually no point loans) is officially above 5%. Depending on how the treasury auctions go this week you could easily see 5.375% become the new norm on 30 year notes. Don't say we didn't warn you! If you are closing a loan in the next 30 days you better have your rate locked in and you better make sure it is locked for a long enough period of time. Rate lock extensions could be very expensive in this market!
Crystal Clear Mortgage
888-634-6911
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