Here is a money update from Narbik Karamian of BeneGroup, Inc.

Interest rates hit another all time low yesterday and today primarily due to the European crisis. As the markets have been hovering in negative territory more than they have in positive, the response to yesterday’s treasury auction (10 yr Note) sent most longer term interest rates steadily lower (lower rates are less enticing for investors bidding at auction), today’s 30 year bond auction was still much stronger than expected, both in terms of the amount of bids as well as the aggressively low yields. That helped the overall fixed-income rally and the Mortgage-Backed-Securities (MBS) that drive mortgage rates were able to benefit, moving to their best levels since early October.

In other words, the higher the demand for U.S. treasury’s, the lower the yield on them becomes. The yield on U.S. treasuries (especially the 10 year treasury) move in the same direction as mortgage rates do. The European financial crisis has caused the U.S. market to become a safer investment ground for investors making the U.S. treasuries higher in demand.

The rate on the 30 year fix conforming (up to $417,000) loan hit 3.75% and the 15 year (conforming) fix hit 3.125%. The interest rate on high balance conforming loans (between $417,001 & $625,000) are at 3.875% for the 30 year fix and 3.25% for the 15 year fix.

Interest rates on ARM (Adjustable Rate Mortgages – 30 year loan term with a shorter fix period) were also very attractive. ARM’s include 3,5,7 and 10 year fix rate periods.

This was the opposite last year this time as the holiday sales boosted hiring and spending making the U.S. economy show signs of improvement. This caused interest rates to move significantly higher last December and did not come back down until April 2011.

If you are considering refinancing or purchasing, it is a great time to do so. Especially, if you are in or about to go into a purchase contract. These are historically low-interest rate opportunities that we are observing.

The U.S. economy has almost put behind it what The European Union is going through nowadays. As the unemployment rate continues to drop very slowly, I believe if/once we are able to put the political disagreements in D.C. behind and see a more stable Europe, we will see an improvement and faster growth in the U.S and global markets.

Please feel free to contact me with any questions.

Best Regards,
Narbik Karamian
DRE Lic: 01372576
BeneGroup, Inc.

A Premier Mortgage Brokerage and Real Estate Consulting Firm

Cell: (408) 315-2834

www.narbik.com

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