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Ben Said:

does my mortgage have to be backed my Freddie Mac to qualify for lower refinance rates?

We Answered:

as long as you can qualify for the new loan it doesn't matter what your current mortgage is or who backs it. if you want a govt backed loan (like fha) you have to qualify and the property needs to be your personal residence.

Marion Said:

Any idea how low mortgage refinance rates expected to drop.?

We Answered:

The Fed Funds Futures are pricing in another 1/2 point rate cut by December. It could happen by the end of November.

I don't know for sure if this will happen, but that is the current prediction.

The problem is the lower rate will help all this massive US debt and home owners but will drive up inflation. I have been arguing for about a year that we run the risk of "Stagflation," (inflation with a recession).

Clarence Said:

mortgage/refinance?

We Answered:

The answer is right now, it is anyone's guess as to what is happening with the market, because the entire market is collapsing at the same time. I work for a very large conventional mortgage lender, and the ususal indicators that would point to rising/lowering rates are conflicting at this time.

That being said, here is what is going on, or things you can follow that may help better answer your question:

1. The dollar is weak - normally would mean rates increase, as this would help attract foreign currency, and push the value of the dollar back up, and thus lower rates in the long-run.

2. Mortgage rates follow the 10-yr treasury index - long term mortgage rates typically follow the 10-yr treasury, and this is the best indicator of rate behavior from one day to the next. Rates will run anywhere from 2-3.5 points higher on average depending on other factors.

3. Fed cuts do not equal mrotage rate cuts. This is the oldest myth in the books, but Fed ACTIVITY and DECISIONS can impact mortgag rates. Example, the last 3 fed cuts in 2007 pushed mortgage rates UP.

4. Good news for the stock market is generally bad news for rates, as people take money out of bonds/treasuries, and dump it back into stocks, thus increasing yields.

5. Recessions are typically good for rates, as people invest mroe in bonds/treasuries during these times, pushing yields down.

6. Liquidity - or what people call demand - will affect rates. If there is no demand for mortgages on the secondary market (as there is right now) then rates go up, and vice versa.

7. PMI companies - yes, these people have a big impact on mortgage programs and rates. You will not be able to finance 100% of a home anymore, at least not conventionally for some time, as the PMI companies will not insure them anymore. Also, two of the largest PMI companies in the US are not expected to make the end of the year, so expect rates - based on this alone - to increase, unless something else happens.

8. Bear Stearns, and other such companies, that go under affect liquidity, and thus rates, and program availability, etc.

As you can see, these are only some of the issues that affect rates. Right now the trend is upward, and it is anyone's best guess as to when it will stop. According to Greenspan's book, he sees rates going back into the double digits sometime in the coming years like back in the 80's.

Also, a mortgage program that was available yesterday, may not be availabe in a week, or even tomorrow, and there is no control over this. We live in a free market, and therefore, these changes happen all the time.

Also, the agencies (Fannie Mae and Freddie Mac) that govern conventional mortgages are implementing pricing adjustments that will affect everyone with scores less than a 710 pretty soon, so rates will be much higher for people with lower scores.

Lastly, mortgage markets are forward-looking, and if the investors feel the news is bad, which it is right now, expect rates to reflect that. Inflation is increasing, and so will rates.

I know that this may not directly answer your question, but I hope it helps.

Mitchell Said:

Mortgage Rates--Refinance?

We Answered:

It is hard to say the rates have risen siginficantly lately, if they follow the same trend as last year the rates will go down in the beginning fall. This is exactly what happened last year the rates went up at the beginning of the summer. You may want to look at getting a good deal now and not refinance later on. If you are going to be in the house for over 5 years then you may want to look at buying the rate down it may be cheaper then actually refinancing in a year for .25% where you will not save any money because of the cost to refinance.