Rates, Mortgage Backed Securities.... what to do? Are you in the process of buying a house. If so, then I am sure you have heard these terms. The government is finally pulling out of mortgage backed securities at the end of the first quarter. The first quarter ends tomorrow, March 31st. The government bought mortgage backed securities in January 2009. This was something that had not been done in the past. They were due to pull out in May 2009 and then December 2009 so I believe the end is in sight. I don't believe that they are going to extend it again. In fact I heard that they might be selling them instead of being an investor. I don't see another large investor signing up anytime soon to keep our rates down.
If you do speak with your lender in the morning then you might want to weigh out the extended locks option if you are building a house or need a lock for 90-180 days. You have to ask your lender how long it would take to break even. Extended locks usually cost extra money depending on the lock terms. I don't believe that rates would climb higher than 5.5% but I do think they will start climbing up quickly. I don't see the rates climbing even close to as high as they were in the 80's. Today is your day to take advantage.
Breaking it up in Layman's terms
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