October 28 Best Mortgage Interest Rates and Lock Recommendation
By: Freeman Liz
October 27, 2009
| Program | Rate | |
| 30 Year FRM | 5.01% | Better by .03 |
| 15 Year FRM | 4.48% | Better by .04 |
| 5/1 Year ARM | 3.95% | Better by .03 |
| Jumbo 30 Year FRM | 6.02% | 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.
TREASURY SALE A SUCCESS, STOCKS DOWN, MORTGAGE LENDERS REPRICING FOR BETTER. Today's Treasury auction of 5-year notes saw a healthy demand and mortgage-backed securities (MBS) rose accordingly. As MBS prices increase, mortgage rates drop. Prices are now on the middle to high side of the range they have been trading in; today is a good day to lock in a low mortgage interest rate.
Today's release of September's Durable Goods report, which measures sales of big-ticket items, brought no surprises, showing an increase of 1% which was expected by analysts. September's New Home Sales, however, did provide a little drama--numbers were expected to increase but that did not happen, even with the first time home buyer credit's expiration looming. This is good news for MBS and mortgage rates, but the report is not considered important enough to drive major changes.
With MBS trading in the good side of their range, today's rates?? should cost about 250% less than yesterday's--it might be smart to lock them in. If closing in the next 60 days I would LOCK my rate. Otherwise, I would 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.
