December 16th Best Mortgage Interest Rates and Lock Recommendation
By: Freeman Liz
December 16, 2009
| Program | Rate | |
| 30 Year FRM | 4.93% | Worse by .02 |
| 15 Year FRM | 4.22% | Worse by .01 |
| 5/1 Year ARM | 4.06% | Worse by .02 |
| Jumbo 30 Year FRM | 6.11% | Worse by .01 |
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.
*** LOCK ALERT *** RATES IMPROVE TODAY ON CPI DATA ***
New home construction rose slightly less than expected by 8.9% to an annualized rate of 574,000. However,?? Building Permits?? are running at an annualized pace of 584,000, which beat analysts' expectations of?? 570,000. This is well off?? January 2006's annualized pace of over 2.2million starts.
The Consumer Price Index (CPI) measures the average monthly price change for a fixed basket of goods and services. Many were expecting this report to show increasing consumer prices. The overall CPI number, which includes food and energy prices, came in as expected, showing a monthly increase of 0.4. The core rate (excluding food and energy) came in lower than expected at 0.0%.
The bond?? and mortgage-backed securities (MBS) markets improved slightly following the release of these economic reports.
Later today, the two-day Federal Open Market Committee meeting adjourns. There is little chance of the feds raising key short-term interest rates. Therefore, the post-meeting statement will likely be the only source of a market movement. This statement could have?? significant influence on the markets and mortgage rates if it offers any clues about what the feds plan to do next. Generally speaking, the bond and MBS markets like to hear?? that the Fed will not be raising rates anytime soon.
If closing in the next 21 days, I would LOCK ; 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.
