January 28th Best Mortgage Interest Rates and Lock Recommendation
By: Freeman Liz
January 28, 2010
| Program | Rate | |
| 30 Year FRM | 4.96% | Worse by .03 |
| 15 Year FRM | 4.30% | Worse by .03 |
| 5/1 Year ARM | 4.19% | Worse by .02 |
| Jumbo 30 Year FRM | 6.37% | Worse by .03 |
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 FOLLOWING SUCCESSFUL TREASURY AUCTION***
Orders for durable goods were unexpectedly up, and new unemployment claims last week were unexpectedly down--both good for the economy and bad for mortgage rates. Even a highly successful Treasury auction of 7-year notes failed to offset this data. Stock markets were off as well, but bonds and mortgage-backed securities markets have not benefited. Tomorrow brings three reports, one of them highly important--the 4th Quarter Gross Domestic Product GDP. We'll also get the 4th Quarter Employment Cost Index (ECI) and the revised reading to the University of Michigan's Index of Consumer Sentiment. If the data points to economic recovery, interest rates increases; if it indicates economic weakness, rates fall. The GDP report is important enough that it could precipitate a large interest rate swing.
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.
