Thinking about rates

I want to thank everyone who's been calling and emailing. I know we're super busy and I really appreciate all the business. I'm doing the best to stay caught up and make sure I get my hands dirty on every deal.

These are amazing times. Everyday there is economic news, good and bad. There are changes happening all over with every lender and every program, some good and bad. And rates are really good still!

To everyone waiting for rates to drop, stop. We're at 5% or better on average, so what are you waiting for? Pay a point, pay two points, with money this cheap you don't want to miss it because over the long run no one has seen much better. Besides, I had an interesting conversation the other day. I was getting into rates and there was a realization (to which I could be wrong) that rates can't get much lower. You can't have 3% rates and here is why; investors can find that elsewhere. Our whole system is based on rates selling on the secondary market, even with all this Fannie and Freddie intervention, we're based on a secondary market. If you could get 1 or 2% in a bond or straight interest savings or money market from the bank, you would take that over a 3% government backed mortgage instrument. Your money would be liquid and there is no risk. So there has to be a natural bottom to where the rates will go. How low, I don't know? but somewhere there is a bottom.

I can't imagine that rates are going to ever be at 2%. I hope they do and I can refi everyone again, but I just don't think so. I often relate rates to the stock market and say "you never buy at the low and sell at the high, so we can just get close" and along with that stocks just don't go to 0, unless they go BK. Rates aren't a company, they're a tool or equation. You can't touch a rate so can it go BK? I will say no. I'm sure there is a flaw in my thinking but until I see it, this makes sense to me. Now, I'm getting a little too Andy Rooney, next thing you know I'll hate water because it's too wet.