Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on December 1, 2008

Locking Stance:  CAUTIOUSLY FLOATING     Mortgage Bonds:  +3bp

Mortgage bonds are already off their lows of the day as stocks look poised to take a beating.  This morning will see a major player in the data arena, the ISM Index, due out at 10am, but news of further tightening of credit on consumers and small businesses will likely overshadow even that data.

This morning, we saw the news of as much as $2 trillion dollars in credit lines being reduced over the next 18 months by major banks, namely Bank of America, Citigroup and JPMorgan Chase.  Those three alone account for over half of all credit lines in the US.  It is expected that credit lines will decline by 45%, further crimping the ability of our economy to re-strengthen, and opening up the taps of money from the Fed and Treasury even more as they will certainly do what they can to get credit free-flowing again.

Mortgage bonds are due for a pullback, though the long term looks pretty good overall.  For those coming up to a closing date, locking is likely the most beneficial choice right now, and always is for those that do not like risk.  For the rest of you, floating may prove very beneficial over time.

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