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RALPH RICHARD GUERTIN

To Lock or Float 2-22-2012

Wednesday, February 22, 2012 - Article by: RALPH RICHARD GUERTIN - Cross Country Mortgage - Message

To Lock or Float, that is the question:
Average 30 yr fixed rates have risen back to 4% from 3.875% for the first time in over a month. Now not a reason to panic but there is more risk than reward potential in this market and 4% is an unbelievable rate, so if you are thinking of a refinance call a mortgage broker and have them shop around for the best rate and terms out there. I know a lot of people are trying to time the bottom of the market in rates, but that can be asking for too much with rates at all time lows, does .125% really make a difference? Below are some factors to consider:

oRates and costs continue to operate near all time best levels
oCurrent levels have experienced increasing resistance in improving much from here
oThere are technical reasons for that as well as fundamental reasons
oLenders tend to get busier when rates are in this "high 3's" level and can throttle their inbound volume by raising rates or costs.
oWhile we don't necessarily think rates are destined to go higher, given the above facts, there seems to be more risk than reward regarding floating
oBut that will always be the case when rates operating near historic lows
o(As always, please keep in mind that our talk of Best-Execution always pertains to a completely ideal scenario. There can be all sorts of reasons that your quoted rate would not be the same as our average rates, and in those cases, assuming you're following along on a day to day basis, simply use the Best-Ex levels we quote as a baseline to track potential movement in your quoted rate).

As they say "Don't be penny wise and pound foolish"

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