Mortgage rate market forecasting

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market forecasting
Posted by: wtj Aug 24 2004, 06:24 PM
just playing the market, with the upcoming elections in NOV, typically mortgage rates get more favorable, in fact, even come OCT they tend to become more favorable? …this is what i have been told recently anyhow

my question is…very subjective here i know, however, would one advise to wait till OCT/NOV to lock-in?

*i know we cannot predict rates nor am i asking anyone to, however, historically i have been told this is the case, maybe someone out there can confirm this or not?
Posted by: loanuniverse Aug 24 2004, 06:34 PM

If you are happy with the rate, the time to lock in is now. A bird in the hand…….

Rates are not seasonal that way….. Just make sure that you are dealing with a reputable lender. If my lender was telling me that, I would question why? in the back of my mind.
Posted by: Commercial Lender Aug 24 2004, 07:10 PM
…..ur right…it is a subjective Q.

In my opinion, the fed raises or lowers the rate to stimulate or dampen consumer spending and it for the most part its effective in controlling gen spending ranging from clothes to travel to cars etc. When you look any individual equity, the biggest chunk is the real estate that person owns. Point being that the purchase is important enough that the majority of the people (at least people i have dealt with) consider the rate to be important but the price of the property and its potential AT THAT time acts as the tipping point. And that is esp true for commercial, where rates important but when a buyer sees the chance to seize a property with good potential…..the rate become a secondary issue. That has been my experience at least. Not to mention that borrowers can re-fi in a few years anyway.

Also, despite weekly rate sheets that lenders give out most lenders maintain rates and will only change them if as per top level financial analysis, def changes are predicted for the next few months. For example, despite the recent rate hike 2 of the biggest commercial lenders (they shall remain nameless  have maintained their rates for full doc loan programs. I think that one of the reasons is the fact that full docs are lower risk loans anyway with profits recouped in the long run.

Also keep in mind that there are lenders out there that have lending programs pegged to different indexes i.e. Prime Rate vs LIBOR (London Interbank Offering Rate). If one tends to be more volatile than the other, you will see rates for one program from one lender go up and the other from a diff lender remain the same or may even drop.

I would be more worried about the potential of the property and whether I would still have the right to buy later on i.e what was stiped in the purchase contract. Also of concern would be the real estate values in the local area and their potential to go up or fall within the next few months in addition to the propensity of the property taxes to increase or decrease.
Author: Commercial Loan Underwriter