September 29th 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.

RATES ARE DOWN FROM SUMMER HIGHS REACHED YESTERDAY AFTERNOON
Today's Case Shiller Home Price index, which tracks the monthly changes in the value of residential homes in 20 metropolitan areas, indicates that home values sampled gained 1.6%. And annually, it reports smaller-than-expected decreases of 13.3%. In the wake of this data, which indicates positive economic changes, mortgage-backed securities (MBS) prices dropped a bit, increasing yields and interest rates.

Today also brought the University of Michigan's much-anticipated Consumer Confidence report, which was expected to continue building on last month's increase and hit 57. However, consumers defied expectations and the index fell to 53.1 from last month's revised 54.5. Analysts believe the change is due to the perception that existing jobs are still in jeaopardy and new employment hard to secure. Following the release of this worse than expected economic data, MBS improved and early losses were wiped out. Expect better pricing by about .125% today. Those inclined to take risks may want to wait for Thursday's ISM report and Friday's jobs data--if fearful consumers are right about employment prospects, rates could drop following the release of that data. Of course, consumers have been known to be wrong.

If closing in the next 15 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.