Mortgage Rate Lock advisory for Friday, November 5, 2010

By
Mortgage and Lending with Bob Amato of Empire Home Mortgage Inc

If you are considering locking an interest rate for a New York or Florida Mortgage consider this post.

Friday’s bond market is trading in negative territory after this morning’s highly important employment data showed stronger than expected results, but is well off of earlier lows. The stock markets initially looked to be moving much higher after the data was released, but they are now showing minor gains of 8 points in the Dow and 3 points in the Nasdaq. The bond market is currently down 6/32, however, this is much better than early morning levels that would have probably led to a spike in mortgage rates. Instead, we should see an increase in this morning’s rates of approximately .125 - .250 of a discount point. Considering what this morning’s report showed, this is good news.

The Labor Department gave us this morning’s major economic news. They announced that the U.S. unemployment rate remained at 9.6% last month as it was expected to. The bad news came in the number of new jobs added to the economy. Today’s report r evealed that 151,000 jobs were added when only 60,000 were expected. It also showed that September’s job loss was reduced by 54,000 jobs, indicating that the labor market was stronger in September and October than many had thought.

Another reading of concern within today’s report was the 0.2% increase in average hourly earnings. Analysts were expecting to see a 0.1% increase in earnings, meaning that workers were paid more than expected last month. That is considered negative for bonds because rising earnings means consumers have more money to spend to fuel economic activity.

Overall, today’s data was not exactly favorable for the bond market and mortgage rates. During early morning trading it appeared this was going to be an ugly day for the mortgage market, but it is apparent that it was only a knee-jerk reaction that we see so often. With the recent rally in stocks that pushed the Dow to its highest level yesterday since Septe mber 2008, it appears that we may be ready for a pullback in stocks. The bond market is near the middle of its recent trading range, allowing me to believe that if we do see stocks fall in the near future that there still is room for bonds to rise. That should help push mortgage rates lower than current levels.

Next week brings us little economic data for the markets to digest, but there are two relevant Treasury auctions that may influence mortgage rates. There is nothing of importance scheduled for Monday, so I am expecting the stock markets to drive bond trading and mortgage pricing. Look for more details on next week’s events in Sunday’s weekly preview.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 6 0 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

 If you are looking for a New York or Florida mortgage consider Bob Amato of Empire Home Mortgage Inc. We answer our phones seven days a week until 9PM. Our toll free number is (866) 742- 5227. Visit our website, www.empirehomemortgageinc.com . You can get answers to all of your financing questions there. We have over 15 years experience and can suggest ways to improve your credit using our Rapid Rescore Program to get you the lowest rate possible. We are a registered Mortgage Broker with the NY and Fl State Banking depts and our loans are arranged through third party providers.

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