Simply put, we take the complex economic data and events that affect mortgage rates on a daily basis and translate them into laymen’s terms. The end result is Daily Mortgage Commentary that allows your average borrower or Realtor to understand how and why mortgage rates changed that day. Keep in mind that the report is geared towards mortgage pricing and not necessarily the stock markets or other indexes. We address only data that is relevant to mortgage rates.
Wholesale mortgage lenders use Mortgage Backed Securities (MBS) for setting mortgage rates, but they are complex instruments that are not easily priced or available to you, your borrower or Realtor. Therefore, we reference the 10-year Treasury Note as the benchmark index in the reports so that our readers can easily follow movements in the markets and rates. However, when we address that morning’s change in mortgage pricing, we use actual pricing from MBS’s to calculate the change in rates that we will mention. We will estimate a range of that day’s change in rates, but we do not publish actual rates due to internal lender strategies and regional/state pricing.
The report is written from the borrower’s point of view. If something improves rates, mortgage rates for the borrower have moved lower or cheaper. An increase in rates means that mortgage pricing has moved higher or is now more costly to the borrower. If the data was favorable to the bond market, it should be taken as good news by the borrower.
We post our report at least six days a week (excluding holidays). Monday through Friday morning gives you a brief snapshot of the markets, an estimate of movement in that day’s mortgage pricing and what economic data or other events took place that morning that were relevant to mortgage rates. We also give a short-term out look of what to expect that afternoon and the next business day or two so that you can make an educated decision towards locking or floating an interest rate.
The last paragraph in the report is our Lock/Float recommendations. It is optional for our Standard/Commercial clients, but is included in the Personal subscription reports. The recommendations are broken down into four different time periods. We believe that the recommendations are consistently accurate, however, please keep in mind that they are not guaranteed. They are made based on a scenario of our author obtaining financing. In other words, what he would do if he needed to make that decision for himself. An important NOTE: A lock recommendation does not necessarily mean that he feels rates are going higher. It likely means that he feels rates are not likely to move much lower during that time frame, therefore, the risk of a higher rate versus the reward of a lower rate does not justify floating any longer.
The sixth day is our weekly preview of the upcoming week that is posted Sunday evenings. This report breaks down the next five days on a day-by-day basis of what economic data, Treasury auctions, Fed speaking egagements and other events that are scheduled that may influence mortgage rates.
The report also is updated during afternoon hours periodically. We will update it intra-day if something drastic happens in rates, but not just because the financial markets are moving. There are occasions where the stock and bond markets do move significantly without mortgage rates following suit. Since our report targets residential mortgage rates, we will not do an afternoon revision unless rates are affected. As an example, we consider the results of the FOMC meetings to be important enough to post again.
As a Personal subscriber, we will email you our report following every update. If you have opted for our Standard subscription, not only will we email the report to you, but we will also send it to your reader list and post it live on your web site (all appearing to be from you).
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