September 28th, 2009 8:40 AM by Eric Fang
All rates are almost at history low except 30 yr fixed programs.
Read an artcle on the mortgage magazine over the weekend, it said that the average profit per loan in the first quarter of 2009 was $1088, up from $148 the quarter before.
That means that the lenders' operation cost is very low nowand their profit margin is very high. And they can lower the rate(thus the profit margin) if they want to.
That's related to the strategy changes from the lenders we sawthis spring. The lenders have the pricing/rate differencefor the loan programs(for example 15 day lock rate is 0.125%better than 30 day lock). So the LOs(the loan originators)will float the loans first, and lock the rate later for a shortperiod when the loan was fully approved.
The lenders benefited from this strategy because their pull-throughratio is much higher than before(they will pay to the investor of around $700 to $1000 for each loans locked but not delivered).Loan brokers have to follow this strategy to survive.
For the current rate, I think the 15 yr fixed rate should be bottomedout. 30 yr fixed rate still have the room for lower rates. ARM ratemay have room for lower if the lenders want to.
10yr fixed and 20 yr fixed rates are very good for 250k loans.Take advantage of this program if you are interested.