July 31st Best Mortgage Rates and Lock Recommendation
By: Freeman Liz
July 31, 2009
| Program | Rate | |
| 30 Year FRM | 5.14% | Better by .06% |
| 15 Year FRM | 4.52% | Better by .04% |
| 5/1 Year ARM | 3.88% | Better by .004% |
| Jumbo 30 Year FRM | 5.61% | 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.
If the market was an ocean, investors would be puking over the sides of their boats by now. The motion is constant---up, then down, then back up--and unpredictable. Mortgage backed securities (MBS) reversed their recent trend, starting out low and picking up steam as economic data trickled out.
The stock market has remained pretty flat, and investors were equally unimpressed with yesterday's bond sale offerings. Yawn. And consumers still aren't spending --probably good for them personally, not so good for the economy.
Today's long-awaited 2nd Quarter Gross Domestic Product (GDP), considered the broadest measurement of economic health across all sectors, indicated that the GDP contracted at an expected -1.0% pace; however, first quarter numbers were revised worse to -6.4%--the largest contraction in economic growth in 27 years! The GDP price index which measures inflation scored lower than expected with only a 0.2% increase and the previous quarter's reading was revised down to 1.9%. So it doesn't appear that inflation is on the near horizon from these reports. Therefore:
I would LOCK my mortgage rate if closing within 30 days; otherwise I would FLOAT 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.
