February 4th Best Mortgage Interest Rates and Lock Recommendation

By: Liz Freeman
February 4th, 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 DOWN SLIGHTLY ON STOCK LOSSES, UNEMPLOYMENT***

I have been recommending LOCK all week in advance of the Employment Situation Report, which will be released tomorrow morning. Today/s weekly unemployment figures came in much worse than expected at 480,000 claims in stead of the predicted 455,000.  While I have reason to expect a bad report tomorrow, I still recommend locking loans today. If the monthly data is worse than expected, rates could drop, but there is little  room for rates to fall further. If the jobs report is better than forecast or even as expected, rates will rise quickly.

If closing in the next 60 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.