December 28th Best Mortgage Interest Rates and Lock Recommendation

By: Liz Freeman
December 28th, 2009  

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 SLIGHTLY IN ADVANCE OF TREASURY AUCTIONS ***

This week is  shortened due to the New Year’s holiday and there is only one important piece of economic data scheduled for release–Tuesday’s release of December’s Consumer Confidence Index. Keep in mind that a short trading week does not translate into calmness. Instead, it often creates larger than usual fluctuations. Despite last week’s holiday schedule, there was plenty of movement in mortgage rates. This week likely will be the same as investors look to make year-end adjustments to their portfolios.  I recommend keeping in contact with your mortgage professional if still floating an interest rate and closing in the immediate future.

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.