Best Jun 15 Interest Rates / and Lock Recommendation
By: Freeman Liz
June 15, 2009
| Program | Rate | |
| 30 Year FRM | 5.17% | Better by .05% |
| 15 Year FRM | 4.59% | Better by .04% |
| 5/1 Year ARM | 3.91% | Better by .01% |
| Jumbo 30 Year FRM | 5.36% | Better by .03% |
Here is today's look at best mortgage rates (which may require points), 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.
Mortgage-backed securities (MBS) markets have continued to improve, gaining back a small chunk of their losses of the previous three weeks. While we aren't seeing 30 year rates back in the 4% range, the spread between the 30-year and 15-year rate is nearly .6%, higher enough perhaps to make taking ona higher payment worth in for those who want to save on interest expense over the life of the loan.
This week, treasury auctions will not be the driving factor they were last week. Investors will be receiving several important reports that will undoubdtedly influence the tug-of-war between Mortgage-backed securities (MBS) and equities. Monday's Empire State manufuacturing Survey, Tuesday's Housing Starts and Producer Price Index (PPI), Wednesday's Consumer price Index (CPI), and Thurday's weekly jobless claims will be the ones to watch.
This morning's stocks have not fared welll as the Russians made it clear that they will continue to support the dollar--the bond market received a nice little boost which was almost immediately reflected in MBS pricing and mortgage rates. With market volatility as high as it is if I were in a position where I had to close soon I would not take my chances. Therefore:
If I were closing a mortgage, 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.
