January 26th Best Mortgage Interest Rates and Lock Recommendation
By: Freeman Liz
January 26, 2010
| Program | Rate | |
| 30 Year FRM | 4.93% | Unchanged |
| 15 Year FRM | 4.27% | Unchanged |
| 5/1 Year ARM | 4.17% | Worse by .01 |
| Jumbo 30 Year FRM | 6.34% | Worse by .01 |
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 FLAT DESPITE GOOD ECONOMIC NEWS***
January's Consumer Confidence Index (CCI) hit late this morning. They reported a reading of 55.9 that exceeded forecasts by over two points. This is bad news for bonds and mortgage-backed securities because it indicates that consumers might be more willing to make expensive purchases in the near future.
In addition, the Fed will auction 5-year and 7-year Treasury Notes Wednesday and Thursday. If there is strong demand from investors, the broader bond market may rally during afternoon hours those days. However, poor performance could lead to a bond selloff?? and higher mortgage rates.
The FOMC meeting which started today ends tomorrow afternoon, and investors will jump on any news released with the notes of the meeting. In addition, the Treasury Dept auctions off its 5-year notes and the results will be announced at 1 PM EST. Healthy demand may boost bond prices and lower mortgage rate, weakness would increase rates. Lenders may price conservatively tomorrow morning ahead of the important news which could break in the afternoon.?? Stay in contact with your mortgage professional this week if still floating an interest rate.
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.
