September 28th Best Mortgage Interest Rates and Lock Recommendation

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.

By lunch time, stocks were up by approximately 2%. The bond market, after starting the day on the upside, leveled off and gave back its early gains. Thirty-year rates are holding on and may impropve slightly. For shorter terms,?? I anticipate rates unchanged or moving very slightly higher.

There is no relevant economic data coming out today, and mortgage-backed securities (MBS) trading has been light. Tomorrow kicks off this week's fairly busy schedule with the first version of?? September's Consumer Confidence Index (CCI). This Conference Board index gives quantifies consumer willingness to spend. Analysts expect an increase from last month's reading, showing more consumer optimism than last month and greater liklihood of larger purchases in the near future. This is bad news for the bond market and mortgage rates because economic growth is driven by consumer spending and is considered inflationary. Experts are calling for a reading of 57.0, up from August's 54.1. If we get a greater-than-expected increase,?? MBS prices?? should move lower and mortgage rates go higher tomorrow.?? I wouldn't chance that if I were closing on a mortgage soon.

If closing in the next 60 days I would LOCK my rate now. Otherwise, I would FLOAT it. 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.