August 28th Best Mortgage Interest Rates and Lock Recommendation
By: Freeman Liz
August 28, 2009
| Program | Rate | |
| 30 Year FRM | 5.07% | Better by .01% |
| 15 Year FRM | 4.30% | Worse by .02% |
| 5/1 Year ARM | 3.89% | Worse by .03% |
| Jumbo 30 Year FRM | 5.72% | Worseby .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.
Mixed data leaves mortgage rates largely unchanged. While the stock market has dipped a bit (which is normally good for mortgage-backed securities or MBS rates), and while personal income remained flat and there wasn't a hint of inflation to worry about, consumer spending was up (mostly attributed to the Cash for Clunkers program) and the University of Michigan's Consumer Sentiment index came in slightly higher than expected.
So the slush of data, none of it important or strong enough to push rates around, leaves us slightly worse today as mortgage lenders have increased pricing slightly. Next week may shake things up with the release of several very important economic reports and the minutes from the last Federal Open Market Committee meeting. There is nothing scheduled for Monday,?? so the bond and MBS markets will be pretty much driven by activities in the stock markets.
Floating a rate seems risky in this market, where rates are still close to their two-month lows. And it's Friday--with rates expected to be pushed by equities on Monday, no one wants to be the victim of a "tape bomb" event over the weekend. Therefore:
I would LOCK my mortgage rate if closing within 60 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.
