May 26th Best Mortgage Interest Rates and Lock Recommendation
By: Freeman Liz
May 24, 2010
| Program | Rate | |
| 30 Year FRM | 4.86% | Worse by .06 |
| 15 Year FRM | 4.15% | Worse by .03 |
| 5/1 Year ARM | 3.85% | Worse by .06 |
| Jumbo 30 Year FRM | 6.43% | Worse by .04 |
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 *** STOCKS UP AND SO ARE MORTGAGE RATES ***
durable goods orders rose 2.9% in April, versus forecasts for a gain of 1.5%. This is good for the economy but bad for mortgage rates. Investors recovered from their fears engendered by European troubles, ans stocks moved higher, also bad for mortgage rates. Yields on 10-year Treasuries were up six basis points, or .06%. This means it would cost about .375% more to get a 30-year fixed rate mortgage than it did yesterday.
If closing in the next 60 days, I would LOCK my rate; if I could get a good deal locking after 60 days I'd probably lock even then; 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.
