Rate Update January 6, 2009

Fixed mortgage rates have moved lower from yesterday.  

 After a lot of talk and reassurance, the Fed has started to purchase Mortgage Backed Securities this morning and bonds are up over 50 basis points in early morning trading.  Assuming that the Fed sticks to its guns and purchases $500 billion in MBS, it will equate to an average of $4 billion per trading day through the end of June.  Although, for each purchase, there needs to be someone willing to sell, we see this as good news in keeping rates low for the first part of 2009.

 We are suggesting a floating stance in the long run, but for shorter term deals (in this volatile market), it is always good to lock in gains and great rates

 Current outlook: floating