The Dow Jones industrial average is plunging post-election, falling by as much as 245 points. The Standard & Poor’s 500 index also falling as much as 27, or 1.6%, with bank stocks taking some of the biggest losses.
Investors are selling off because of the fear of what a fiscal cliff negotiation will mean, said chief investment strategist James Paulsen at Wells Capital Management in a statement.
However, with the economic uncertainty comes changes in mortgage rates because investors are piling up mortgage-backed bonds, driving bond prices up. As a result, mortgage rates are heading down, according to active loan officer Dan Green of Waterstone Mortgage.
For mortgage borrowers in locations such as San Jose, Cali. borrowing at the local conforming loan limit of $625,000, with the mortgage price by 1 discount point, lowers the closing cost by $6,255.
The change is also affecting multiple mortgage products such as HARP 2.0 improvement, FHA Streamline Refinance improvement and BA Streamline Refinance improvement, Green is reporting.