Florida Mortgage Daily – Midday Report

by Florida's #1 Mortgage Planner on September 8, 2008

Locking Stance:  CAUTIOUSLY LOCKING     Mortgage Bonds:  +116bp

I thought you might get a kick out of the new stance.  Ever heard that one before?

Mortgage bonds, as I thought might, began another rally.  The problem is that more profit taking will take place when traders think they bonds cannot sustain the rally.  Any time a large move in the markets is made, there is always a “retracement”, meaning bonds will drop significantly, usually at least 1/3 of the move, once the rally comes to an end.

Since I am a conservative, especially when it comes to providing advice about locking or floating, I remain in a locking stance to protect your hard earned money.  More gains may yet be made, but losses can take place just as fast, maybe even faster.

Let me break down my recommendation and may “cautiously locking” stance.  If you are nearing closing, lock that loan ASAP and just be happy.  If you are more than a week and can stomach volatility, maybe even afford to lose a little, floating will likely pan out for you.  More than a week or so out for closing, floating may still be in your best interests because the charts point towards lower rates long term and mortgage backed securities will likely continue to move higher (lower mortgage rates) providing more gains, even with any corrections.

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