OK smarty pants - how low will rates go?

I got the above email from a client yesterday. I got a chuckle out of it, but also, it gets right to the point. For people trying to refinance their mortgage, how low will the rates go? The 30 year fixed rate mortgage...

The truth is, the refinance game is much more complicated than ever before, and there is a great deal more uncertainty. More complicated in that there are more pricing adjustments than ever coming from Fannie Mae and Freddie Mac, adjustments that make the final rate higher than what many are expecting.

More uncertainty in that many deals are coming down to appraisals, and LTVs. And these appraisals are a bit of a crapshoot. Most appraisers are very sympathetic to the situation, and are generously providing neighborhood comps, and their opinions, before they book the appraisal. But that mainly weeds out the obvious value problems; you just can't weed out the close calls until an appraiser steps onto the property. Unfortunately, it's a financial risk that the borrower usually takes upfront, and there's really no getting around it.

So, Ok smarty pants - again I ask, how low will rates go?

My guess is that we're going to see very agressive action coordinated between the Federal Reserve, Treasury, and FDIC within the next two weeks. And by the end of February, we will see 30 year fixed rates, for the best borrowers, at 4.25%. That's my best guess. Keep an eye on the charts, the Wilder Rsi. Lock when the Wilder Rsi goes back into a bottoming formation. I'll be posting the updates on this blog. I'm making an effort to make at least one post per day.

btw, if you want to email me, my email is admin@waterfrontmtgdirect.com