The long awaited minutes from the Federal Reserve’s last meeting were released on Wednesday and the result was a spike in mortgage rates. Experts were waiting to see if the minutes would give a clearer indication as to when the Federal Reserve will begin scaling back on the stimulus program, which involves buying $85 billion in bonds each month. Despite little information being added, mortgage rates have climbed to two-year highs.
Although the minutes provided no new or exciting details, there was nothing in the minutes to indicate that the tapering of the bond buying program won’t begin before the end of the year. Many believe the Federal Reserve will make the move on Sept. 18 to start the tapering. Mortgage rates have been volatile the last couple of weeks with the concern of when the bond buying program will be ending and with the mixed data about the country’s overall economic health.
With no definitive details that indicate the stimulus program will be extended, the excitement got underway and rates that had dropped the day before begin to increase again. The end result is that although the rates vary from lender to lender, they all are near their highest rates in two years, settling around 4.75 percent for the best-execution 30-year loans.
More economic reports are due in the coming days, including the employment report due out on Thursday. The most significant report, however, is due to be released the Friday after Labor Day and could have an impact on the markets and rates. In the meantime, those getting a mortgage today will pay a little more based on the rates.
The average rates today for a best execution loan are as follows: The 30-year fixed rate is up .03 percent to 4.74 percent while the 15-year note saw an increase of .01 percent to level off at 3.82 percent. The FHA 30-year note saw a .03 increase to level off at 4.40 percent. The 30-year Jumbo stayed unchanged at 4.72 percent. Rounding out the group was the 5/1ARM which saw a .05 percent increase to end at 3.34 percent.
Different lenders do have different fees and loan origination fees, closing costs, and other fees can have an overall impact on the total cost of a loan. Before deciding on a lender evaluate the total charges involved and see which rate results in the lower overall cost during the life of the loan.
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