January 4th Best Mortgage Interest Rates and Lock Recommendation

By: Liz Freeman
January 4th, 2010  

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 DROP SLIGHTLY DESPITE ECONOMIC IMPROVEMENT***

Today the market recieved two economic reports.   First out was the ISM Manufacturing index which provides a measure of the strength of manufacturing conditions across the United States.  Readings above 50 indicate expanding conditions while readings below 50 indicate contraction.   Forecasts called for a read of 54.8 for December.   The survey came out better than the expected at 55.9.

It was offset, however, by the Construction Spending report. Today’s release indicated that construction spending fell more than expected by 0.6%, the seventh straight month of declines and the lowest level in over six years.

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.