While the Fed’s “Operation Twist” announcement caused widespread reduction of mortgage rates across the nation, Wells Fargo (NYSE: WFC) did not respond significantly in the area of refinance mortgage interest rate quote reductions.
30 year fixed rate refinance quotes fell from 4.375 to 4.25%. The new loan carries an APR of 4.639%.Wells Fargo isn’t the only one who didn’t drop refinance rates, Chase bank is still quoting 4.375% for its 30 year refi.
30 year FHA refinance loans are a bit better at 3.875%. But carry a steep APR of 4.510%.
15 year fixed-rate refi’s are 3.25% today with an APR of 3.766%. This beats Bank of America’s 3.625% quote and also Chase Bank’s 3.75% quote for the same loan today.
Adjustable rate mortgage interest showed a little the motion with Wells Fargo’s five-year ARM landing at 2.625% and the FHA version of the loan at 2.75%. Chase Bank is quoting 2.375% for the five-year ARM for refinance and 2.75% for the seven-year ARM.
While the initial reaction to the Fed’s plan was positive, it remains to be seen whether the $400 billion purchase of long-term treasuries will have much effect on mortgage interest rates over the next six months. It is often the case that Federal Reserve announcements affect financial markets more than Federal Reserve actions.