How Loans Are Being Priced Now

The problem currently is the fact that no one wants to invest in these mortgage pools called MBSs or CMOs.  So pricing is now based on how easily these packages are sold off and at what rate they are sold.  So instead of watching the three indexes listed before, now you can watch MBS pricing.

There is a great place you can watch it even hour by hour:

Click Here  - Try clicking the 1d next to range, that will show you intraday trading. 

The first thing you'll notice is that there is a difference between the trade amount and current rates for a 30 year fixed.  The reason for this is that the loan originator gets to keep a portion for profits, some goes to mortgage brokers, etc.  You'll notice that amount is about 1/2% right now.  But you can see how rates are trending.  That way you can decide whether to lock a rate in or not.  As of November 12, 2008 it looks like it's a great time to look with rates are at or slightly under 6%.

Keep an eye on this figure though, this tells you sentiment, the higher it trades, the more worried investors are, the lower, the better it gets.

If you have money and are on the fence without another home to sell...it's a great time to buy.