August 17th Best Mortgage Interest Rates and Lock Recommendation
By: Freeman Liz
August 17, 2009
| Program | Rate | |
| 30 Year FRM | 5.11% | Better by .04% |
| 15 Year FRM | 4.30% | Better by .09% |
| 5/1 Year ARM | 3.80% | Better by .04% |
| Jumbo 30 Year FRM | 5.61% | Better by .03% |
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.
The stock market has been battered this morning, reacting to losses in international markets that occurred while we were enjoying the weekend. Remember the term I mentioned Friday? "Tape-bombs," which are events that occur when the markets are closed over the weekend and affect our finances while we can't do anything about it. Fortunately the bombs worked in our favor if looking for a mortgage, not so well if you bought stocks on Friday.
With no major economic data being released today, mortgage-backed securitites and bonds will largely be driven by stock market charges and retreats. Currently investors are spooked, bond yields are significantly down (nearly .10 of a point), and I'd expect nice rates on offer today. I'd grab them. The only important economic data coming out this week is tomorrow's producer Price Index (PPI), which indicates if inflation is hitting producing (not retail) sectors of the economy. Expectations are that the index will decrease. with little in the way of wage pressure and commodities relatively stable as well. Nothing much this week, probably a few small bumps and dips as equities and MBS trade for the top spot in investors' confidence..
I would LOCK my mortgage rate if closing within 30 days; otherwise I'd FLOAT my 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.
