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by Trevor Sines

Mortgage rates moved lower today as investors sought safe haven from global political risk in the bond market.  When investor demand for bonds increases, rates generally fall, all things being equal.  Today’s improvement was fairly healthy, too.  You’d have to go back to January 23rd–exactly 2 weeks ago–to see anything better at the average lender.

4.25% has been the most common conventional 30yr fixed rate on top tier scenarios.  While that’s still technically true, stronger lenders are increasingly moving down to 4.125% on days like today.  Keep in mind that the difference between 4.125% and 4.25% isn’t quite as simple as 0.125%.  True, the gap between “contract” rates (which governs the monthly payment) at stronger/weaker lenders would be 0.125%, but the gap between “effective” rates (which take upfront costs into consideration) is typically smaller.  In other words, average lender-imposed upfront costs associated with 4.25% are smaller than the costs associated 4.125%.

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