June 24 Best Rates / Lock Recommendation

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 remained quite stable in the aftermath of the Federal Open Market Committee's 2 day meeting. No surprise announcements and no policy changes intended. Many mortgage lenders hoped for some announcement that would cause a spark in the MBS market and get rates back below 5%, but there was almost nothing said about housing altogether. The only major data released was The Labor Department last week's unemployment figures, with 627,000 new claims filed. This is more than the previous week's revised total of 612,000 and way higher than economists' forecasted 600,000. Borrrrring. Not much happening in the near future either.

Therefore:

I would LOCK my rate if closing within 7 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.