JPMorgan Chase & Co. (JPM), Wells Fargo & Co (WFC), Bank of America Corp (BAC): Did You Miss Your Chance to Grab a Cheap Mortgage?

Mortgage rates remain historically cheap, and sitting on your hands in hopes that rates get even cheaper probably isn’t prudent. The Fed’s itching to call a halt to its bond-buying program, and this suggests mortgage rates will keep going up — hopefully not as sharply as last week, but still up. It behooves you to get while the getting is still good — and while you’re at it, look long and hard at taking out a 15-year FRM rather than a 30. That nearly 1% difference in rates looks awfully enticing.

Make that takeaway(s)
Meanwhile, for investors, there’s a second takeaway here. Check out this table of quoted rates on U.S. government Treasury bill prices, published by the Fed on June 24:

It shows that over the course of just five trading days, the popular 10-year Treasury bond jumped 15% in yield — rising right in line with the 15% jump in 15-year FRMs, and faster than the 13.5% spike in 30-year FRMs. If this trend continues, it could put the hurt on residential mortgage lenders such as JPMorgan Chase & Co. (NYSE:JPM), Wells Fargo & Co (NYSE:WFC), and Bank of America Corp (NYSE:BAC). They may find the cost of getting money to lend from the Fed, rises faster than their ability to charge more for the money they lend as mortgages.

In fact. I can pretty much guarantee this is the case for one of these bankers. Just last month, Chase bought the rights to service my mortgage, and quickly sent me an offer to reduce my rate from 4.75% to 4.25% — no charge. Had I taken them up on that offer, Chase would already, today, be underwater on my mortgage, and out of pocket the closing costs to boot.

That’s bad news for JPMorgan Chase & Co. (NYSE:JPM), which has more than $123 billion in residential mortgage loans on its books. For Bank of America Corp (NYSE:BAC) ($253 billion) and Wells Fargo & Co (NYSE:WFC) ($325 billion), it could be even worse.

The article Did You Miss Your Chance to Grab a Cheap Mortgage? originally appeared on Fool.com and is written by Rich Smith.

Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool recommends Bank of America and Wells Fargo and (NYSE:WFC) owns shares of Bank of America, JPMorgan Chase, and Wells Fargo.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.