October 29th Best Mortgage Interest Rates and Lock Recommendation
By: Freeman Liz
October 27, 2009
| Program | Rate | |
| 30 Year FRM | 5.02% | Worse by .01 |
| 15 Year FRM | 4.49% | Worse by .01 |
| 5/1 Year ARM | 3.96% | Worse by .01 |
| Jumbo 30 Year FRM | 6.00% | 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.
STOCKS UP, RATES TOO. Equities gained today on the release of economic data that indicates the economy is breaking out of its slump faster than experts anticipated. The 3rd Quarter Gross Domestic Product (GPD) jumped 3.5%. The expansion of the economy fuels inflation concerns and investors shy away from bonds in favor of the stock market.
Yesterday's Treasury auction went quite well, however, and if demand for trasuries continues at today's auction, rates may improve this afternoon. On the other hand, lukewarm interest may spur rates higher. Hopefully, everyone locked yesterday when conditions were favorable. If you didn't, you might want to wait for stocks to have a bad day and then pull the trigger.
If your mortgage approval depends on keeping the rate low, you should lock in soon. Rates continue to be rangebound, but have drifted slightly upward over time. If closing in the next 60 days I would LOCK my rate, probably this afternoon or next Monday. 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.
