June 30th Best Mortgage Rates and Lock Recommendation
By: Freeman Liz
June 30, 2009
| Program | Rate | |
| 30 Year FRM | 5.15% | Worse by .04% |
| 15 Year FRM | 4.62% | Worse by .05% |
| 5/1 Year ARM | 3.97% | Worse by .03% |
| Jumbo 30 Year FRM | 5.52% | Worse by .04% |
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 stable overall but I'm noticing a slight upward trend in yields, which is not great for consumers and I would watch that carefully if I had a loan in play. The stock market indexes are largely down, and the bond market hasn't done its usual move in the opposite direction -- benchmark 10 year bonds are yielding 3.5%. What gives? A mixed bag of economic reports has made investors nervous and many subscribe to the "when in doubt, wait it out" theory. So no one's doing the happy dance except apparently Ruth Madoff.
Today's Consumer Confidence and S and P Home Price Index came in lower than expected--much lower. While normally this would be good for MBS, the lack of confidence seems to have spilled over from consumers to bond investors. If you're a gambler, you might wait and see if bonds do what they're supposed to and yields drop--I'd say it's a 50/50 shot there might be repricing for better tomorrow morning. But I'm not. 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.
