December 30th Best Mortgage Interest Rates and Lock Recommendation

By: Liz Freeman
December 30th, 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 IMPROVE, BOND MARKET UP***

The bond market is currently up slightly on flat stock sales and thin trading, and due to strength late yesterday this morning’s mortgage rates improved by approximately .250 - .375 of a discount point.

There is no major economic data today, but there is the 7-year Treasury Note auction. Yesterday’s 5-year note sale saw average demand, than anticipated, good for bonds and mortgage-backed securities. As many traders  are wrapping up loose ends for 2009, it is unlikely that the auction will cause a significant reaction to its sale results when they are posted

If closing in the next 60 days, 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.