January 19th Best Mortgage Interest Rates and Lock Recommendation

By: Liz Freeman
January 19th, 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 HOLDING, LOCK BEFORE THURSDAY ***

The Labor Department will post their Producer Price Index (PPI) tomorrow.  If it meets expectations or comes in lower than forecasts,  mortgage rates could close the week lower than today’s opening levels.  Thursday, there will be discussion about Congress raising the debt ceiling that may put the size of the U.S. debt in focus again. This could pressure the bond market as people refocus on inflation. For that reason I recommend locking before Thursday if you are at all risk-averse.

If closing in the next 30 days, I would LOCK my rate; 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.