Mortgage Rates: Hovering Near All-Time Lows

August 18, 2011 By

Borrowing costs improved once again today. Mortgage rates are hovering near all-time lows.

Though many lenders have greatly improved their consumer rate quotes over the past two weeks, we must point out an increased amount of variety in what individual lenders are now quoting as their Best Execution rates.  This is a factor of price volatility in the secondary mortgage market. Unfortunately when volatility picks up in the secondary mortgage market, the cost of doing business gets more expensive for lenders (hedging costs go up). Those added costs are usually passed down to consumers via extra margin in rate sheets. These costs are unavoidable. The best thing for mortgage rates right now is stability. Additionally, some lenders have been adjusting their loan pricing strategies to better control the flow of new loan originations.  To put it more simply, some lenders are busier than others and can’t take-in anymore business, so they’ve pushed rates higher to encourage consumers to either wait it out or find another lender before rates rise.

CURRENT MARKET*: The Best Execution 30-year fixed mortgage rate  has fallen to 4.125%.  Several lenders are willing to offer 4.000% and even 3.875% is possible for those interested in buying down their rate. 4.250% is widely-available. On FHA/VA 30 year fixed Best Execution is 4.000%, but 3.875 and even 3.750 are available with additional closing costs.  15 year fixed conventional loans are best priced at 3.625% but we’re seeing aggressive quotes as low as 3.375%. Five year ARMs are still best priced at 3.25. ARMs seem to have bottomed out.

CHART OF RECORD LOW BORROWING COSTS

GUIDANCE: If you missed the boat on record low mortgage rates last November/October, the opportunity is still out there for the taking. And we think you should jump on it as soon as possible. The risks involved in floating have greatly expanded to include (1) lenders taking it upon themselves to negatively adjust rate sheets (to slow loan production) and (2) interest rates finding a bottom and moving higher on their own.   The frustration of missing out on “high 3′s” and instead getting “low 4′s” seems nowhere near as bad as the frustration of missing out on a refi opportunity (moving from 5% to 4.25% for instance) altogether.

 

Mortgage Rates: Hovering Near All-Time Lows.

Filed Under: Foreign Exchange, News

Two Different Approaches, Same Results

October 20, 2009 By

By Rick Pendergraft

Just a few days ago, Karim Rahemtulla, one of my counterparts at Mt. Vernon Research, stopped by our office in Delray Beach, FL to say hello. I think he was only looking for some chocolate, but, as is often the case when two traders get together, the conversation turned to the market.

It turns out we were both trading the S&P Financial Select SPDR (XLF) put options. (Just a reminder: Puts are instruments that benefit the buyer when the stock, or, in this case, the ETF, drops in value.)

Now the odd thing is that Karim was selling the XLF puts and I was buying them. He was betting that the XLF would remain above the 20 level. So he was making money by collecting the premiums and letting the puts expire worthless.

I was buying the April 28 puts, which meant that I made money when the XLF fell from $27.50 to $24.50.

Two totally different approaches to trading the XLF puts. But we were both making money.

I prefer buying options to selling options. When you buy an option, the worst that can happen is you’ll lose 100 percent of what you paid for it. Meanwhile, your upside is unlimited. When you sell an option, your gain is maximized then and there. But your downside is unlimited. Given the choice, I’d rather maximize the upside and minimize the downside of any trade I make.

That is the name of the game when it comes to trading. There are many ways to trade. There are many ways to make money in the market. The key is to find the type of trading that works best for you.

Filed Under: Foreign Exchange, What's Terry Reading

Exchange Rate

October 20, 2009 By

In finance, the exchange rates (also known as the foreign-exchange rate, forex rate or FX rate) between two currencies specifies how much one currency is worth in terms of the other.

For example an exchange rate of 102 Japanese yen (JPY, ¥) to the United States dollar (USD, $) means that JPY 102 is worth the same as USD 1.

The foreign exchange market is one of the largest markets in the world. By some estimates, about 2 trillion USD worth of currency changes hands every day.

The spot exchange rate refers to the current exchange rate.

The forward exchange rate refers to an exchange rate that is quoted and traded today but for delivery and payment on a specific future date.

Filed Under: Foreign Exchange

Foreign Exchange

April 29, 2008 By

Foreign Exhange or Forex as it is more commonly known is not something that we specialise in nor is it something we believe you should engage in unless you are very well informed.

We do believe however in the fact that you should have all the information you need about all kinds of investments and so we have included this category of investment in our website.

Forex allows you to achieve very high returns and at the same time you can lose a lot of money so any investment like this should only be entered into after consultation with your wealth coach to determine how it may affect your long term financial plans.

The information provided here has been produced thanks to our affiliation with Forex affiliate.

Forex? What is it, anyway?

The market
The currency trading (FOREX) market is the biggest and fastest growing market on earth. Its daily turnover is more than 2.5 trillion dollars. The participants in this market are banks, organizations, investors and private individuals, just like you. (click here to read full market background by Easy-Forex™).

The goods (merchandise)
Markets are places to trade goods, and the same goes with FOREX. The Forex goods are the currencies of various countries. You buy Euro, paying with US dollars, or you sell Japanese Yens for Canadian dollars. That’s all.

How does one profit in Forex?
Obviously, buy cheap and sell for more! The profit potential comes from the fluctuations (changes) in the currency exchange market.
The nice thing about the FOREX market, is that regular daily fluctuations, say – around 1%, are multiplied by 100! (in general, Easy-Forex™ offers trading ratios from 1:50 to 1:200).

How risky is Forex trading?
You cannot lose more than your “margin” (your initial investment)! You may profit unlimited amounts, but you never lose more than what you initially risked. However, risk only what you can afford and is not vital for your well-being.

How do I start trading?
Register (Easy-Forex™ offers the simplest and quickest registration process, no obligation); deposit your first trading “margin” amount (credit cards are welcome, only by Easy-Forex™); start trading.

How do I monitor my Forex trading?
Online, from anywhere, anytime. You have full control to monitor status, check scenarios, change some terms in the deal, or close it.

Want to know more? Want to get on-line training? Register here (quick, no obligation), we’ll be glad to guide you, every step of the way.

Good luck!

Forex trading involves substantial risk of loss, and may not be suitable for everyone.

Filed Under: Foreign Exchange
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