July 2nd Best Mortgage Rates and Lock Recommendation
By: Liz Freeman
July 2nd, 2009
| Program | Rate | |
| 30 Year FRM | 5.14% | Better by .05% |
| 15 Year FRM | 4.58% | Better by .06% |
| 5/1 Year ARM | 3.94% | Better by .02% |
| Jumbo 30 Year FRM | 5.56% | Better by .02% |
Here is today’s look at best mortgage rates, (which do not include discount points, origination points, or loan level risk based price adjustments) provided by Mortgage News Daily, Freddie Mac, and other sources. Note that Freddie Mac’s AVERAGE rates are typically higher than BEST rates, because average rates include surcharges for risks associated with property types, down payments, and credit scores. To be eligible for BEST rates, borrowers need spotless credit (740 score or better), a sizable down payment (20-25%) or equity amount, and stable, adequate, and documentable income. In addition, the property must be located in a healthy (not declining) market and must be conventionally built.
Stocks tanked big time as June payroll report showed a fourth straight monthly increase in job losses. The effect was felt so strongly because analysts had been projecting losses of about 365,000. They got 467,000. The national unemployment rate is now 9.5%. While terrible for the stock market, this kind of news is great for bonds and mortgage-backed securities (MBS). Rates dropped back, giving up recent increases and making locking a less painful proposition for borrowers.
AM data from mortgage pros shows rates improved from yesterday, with a par 30 year fixed rate loan in the 5.00% to 5.25% range for top-drawerborrowers. If you are still floating your rate, you might want to keep an eye on the MBS market today and look for price improvements. Keep in mind though that with a 3 day weekend coming up it is not unusual for lenders to be reluctant to be too generous with rate reductions as anything can happen over the weekend.
Therefore:
I would LOCK my rate if closing within 15 days; otherwise I would FLOAT my mortgage rate. This is only an opinion–what I would do if I were closing a mortgage at this time. Your decision may depend on other factors such as the strength of your loan approval and your tolerance for risk, and must be made with those in mind.
Liz Freeman has more than a decade of mortgage lending experience. She writes about mortgage and finance issues and is a regular contributor to Mortgage News Daily.
Share this article with:
Delicious
Digg
reddit
Facebook
StumbleUponJuly 1 Best Mortgage rates and Lock Recommendation
By: Liz Freeman
July 1st, 2009
| Program | Rate | |
| 30 Year FRM | 5.19% | Worse by .04% |
| 15 Year FRM | 4.64% | Worse by .02% |
| 5/1 Year ARM | 3.99% | Worse by .02% |
| Jumbo 30 Year FRM | 5.58% | Worse by .06% |
Here is today’s look at best mortgage rates, (which do not include discount points, origination points, or loan level risk based price adjustments) provided by Mortgage News Daily, Freddie Mac, and other sources. Note that Freddie Mac’s AVERAGE rates are typically higher than BEST rates, because average rates include surcharges for risks associated with property types, down payments, and credit scores. To be eligible for BEST rates, borrowers need spotless credit (740 score or better), a sizable down payment (20-25%) or equity amount, and stable, adequate, and documentable income. In addition, the property must be located in a healthy (not declining) market and must be conventionally built.
Stocks are up and there were no surprises in today’s economic reports. So treasuries and mortgage-backed securities (MBS) continued to be beaten up as equities surged. Repricing for the better did not occur yesterday, but if you locked at the end of the day then you are better off than you would be locking today.
Most lenders did reprice for the worse when they opened this morning, increasing mortgage lending costs by .25 in fees. The benchmark 10 year treasury note has moved to a yield of 3.55% as of this writing. Though not always in directly correlated, changes in treasury yields usually push MBS in the same direction. Prices are down–nd as PRICE falls, YIELD rises. The “price” falling means that investors want higher yields (interest rates) to be induced to buy bonds or MBS. This extra yield is passed on to borrowers as a higher rate or extra fees. Tomorrow’s Employment report is the big booger for the week–if it comes in significantly different from expectations we could see wild swings in rates and they might stay there a while. Therefore:
I would LOCK my rate if closing within 15 days; otherwise I would FLOAT my mortgage rate. This is only an opinion–what I would do if I were closing a mortgage at this time. Your decision may depend on other factors such as the strength of your loan approval and your tolerance for risk, and must be made with those in mind.
Liz Freeman has more than a decade of mortgage lending experience. She writes about mortgage and finance issues and is a regular contributor to Mortgage News Daily.
