Rate Lock Advisory

Wednesday's bond market has opened down slightly despite much weaker than expected economic news. The stock markets are also showing losses with the Dow down 35 points and the Nasdaq down 7 points. The bond market is currently down 3/32, which will likely push this morning's mortgage rates higher by approximately .125 of a discount point.Today's prelimina ry reading of the 4th Quarter Gross Domestic Product (GDP) revealed an annual growth rate of 0.6%. That was half what analysts were expecting to see and indicates that the economy was in much worse shape than many had thought during the last three months of last year. This is good news for the bond market and mortgage rates as it eases inflation concerns that hurt long-term securities such as mortgage related bonds.However, preventing a bond rally is today's adjournment of the two-day FOMC meeting that started yesterday. It will adjourn at 2:15 PM ET this afternoon and is somewhat expected to yield no change to short-term interest rates following last week's surprise .75 cut. Some traders are calling for further rates cuts at this meeting, but I don't expect to see one so soon after last week's move. As usual though, traders will be looking for any indication of the Fed's next move. This could bring a great deal of volatility in the markets this afternoon and lead to significant changes to mortgage rates, so please be careful. Look for an update to this report shortly after the markets have had an opportunity to react to the news.If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Lock if my closing was taking place between 21 and 60 days... Lock if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers. ©Mortgage Commentary 2008