February 8th Best Mortgage Interest Rates and Lock Recommendation

By: Liz Freeman
February 8th, 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 FLAT IN ADVANCE OF TREASURY AUCTIONS***

Rates little changed from Friday. Barring a major shift that pushes Treasury yields lower, mortgage rates should increase in months in the next few months. While floating day to day can net you a slightly lower rate, the risk of increases in prohibitive. If you continue floating,  watch the stock market. If stocks stay weak, you could float another day but I think we’ve hit the floor with mortgage rates. And if stocks rally, investors will abandon the fixed income instruments which would most likely lead to  higher rates

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.