January 21st Best Mortgage Interest Rates and Lock Recommendation
By: Freeman Liz
January 21, 2010
| Program | Rate | |
| 30 Year FRM | 4.92% | Better by .03 |
| 15 Year FRM | 4.25% | Better by .02 |
| 5/1 Year ARM | 4.12% | Better by .02 |
| Jumbo 30 Year FRM | 6.33% | Better by .02 |
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 PLUNGE AS STOCKS TANK ***
Today's weekly unemployment report brought a surprise--instead of the 440,000 new claims analysts expected, we got a whopping 482,000. This bad economic news would have been enough to push mortgage interest rates down all by itself. But wait, there's more. President Obama announced a plan to curtail banks' investments and size, and investors did not take the news well. The major sell-off sent people flying back to bonds and mortgage-backed securities, and pushed mortgage interest rates to their lowest point in 2010.
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.
