Mortgage Rates: Closing Costs Creep Higher After Treasury Auction

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Posted To: Mortgage Rate Watch

It was an interesting day for mortgage rates. Benchmark Treasury yields rose and MBS prices fell which forced lenders to reprice for the worse. However, as paradoxical as it seems, best execution mortgage rates are actually DOWN on average, but the cost to obtain those rates is UP. This is because "best execution" is determined by finding, for lack of a better term, the best "bang for the buck" among the commonly available interest rates. For example, if it costs and extra 1% of your loan amount to go from 4.875 to 4.75, but costs an extra 1.5% to go from 4.75 to 4.625, the better execution choice would be 4.75. So today then, although the market worsened slightly, following today's Treasury auction, the "sweet spot" best-execution rate on 30 year conventional home loans shifted from being...(read more)

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Source: www.mortgagenewsdaily.com

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