Comments on: Bad News: Mortgage rates/bonds yields are going up

By: lakshmanan

lakshmanan — Wed, 12 Mar 2008 17:21:43 +0000

y 30yrs, with .125 and 399 fee.

By: intelligent

intelligent — Wed, 12 Mar 2008 13:16:31 +0000

Yes..i think the Mortgages link up will not definitely reduce by the FED cuts and recession in the U.S economy may also effect and be a factor.

By: Frugal

Frugal — Wed, 12 Mar 2008 07:33:59 +0000

Lakshmanan,

Is that a 30 yr rate, with fee? I think it’s not too bad. I believe the lowest that can be achieved this year is probably in the neighborhood of 5.375% to 5.5%. So you are only 2/8 to 3/8 off, which is reasonable.

Soullfire,

I agree with you. Fed’s cut is mostly saving banks & wallstreet.

By: lakshmanan

lakshmanan — Tue, 11 Mar 2008 17:48:26 +0000

What is optimum rate to lock based your observation.. I locked 5.75% with .125 point .. was it reasonable ?

By: Soullfire

Soullfire — Tue, 11 Mar 2008 14:26:04 +0000

Mortgages are linked to the 30 year bond, and thus wont be directly reduces by the Fed cuts. Those looking for shorter term ARM refinancing will benefit….only a temporary reprieve in my opinion.

Now if inflation continues to climb, and there’s no doubt it will thanks to the printing press Fed, this will directly impact bonds as their yields will have to increase to keep them attractive. No one is going to want to buy a bond that’s paying out less than the inflation rate. This is what will drive up fixed mortgage rates.

This begs the question- who is the Fed really helping with these rate cuts? Looks like they are helping Wall Street at the expense of Main Street.