February 3rd Best Mortgage Interest Rates and Lock Recommendation

By: Liz Freeman
February 3rd, 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 OFF SLIGHTLY DESPITE STOCK LOSSES***

Mortgage rates are holding relatively steady despite losses in the stock market. The Institute for Supply Management released its services index today — it came in at 50.5,  a little lower than expected, which would be good for mortgage rates if it were important enough to have much effect. Next major piece of news is Friday’s monthly employment report — that one has the potential to move rates substantially. Recommend locking as there is little upside potential in floating your interest rate.

If closing in the next 45 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.