December 21st 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.

*** LOCK ALERT *** RATES UP SHARPLY, EXPECT VOLATILITY ***

Mortgage-backed securities (MBS) trading is pretty much done for 2009.?? Not much important economic data is scheduled for release, and most people are not undertaking a mortgage refinance or home purchase during the holidays, and investors are taking off for the holidays--so from here on out, the market will be influenced by movements in equities and pointless whims. In addition, thin trading means volatility--rates may move drastically for no apparent reason.?? Bonds are off this morning almost a full point, which will likely push home loan rates higher by 0.750 of a discount point.

Click on the mortgage rate table for the latest mortgage loan rates.

If closing in the next 7 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.