Market Instability

There has been lots of turmoil in the mortgage market over the last month, and the continued slide of mortgage bonds means the trend of higher interest rates will likely continue.

Last Thursday's drop in the bond market was the largest single day loss in over three years. Friday we saw a reaction to this with a bit of a bounce but this morning we are right back on the downward curve. There are some important economic reports coming out later this week with information on the status of our retail and manufacturing sectors. Even if we receive good news here on the home front international economics will make it tough for the market to find stability.

This puts a bit of pressure on people who have adjustable rate mortgages (ARM) coming up on an adjustment as 30 year fixed rates have gone up a bit. Nonetheless, it may still be the right move to refinance out of an ARM to ensure that 12 months down the road the rate on an ARM doesn't have the chance to get even worse. Remember, once you are my client, when rates improve enough, I will pay the majority of your closing costs!