July 20th Best Mortgage Interest Rates and Lock Recommendation

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 INCREASE SLIGHTLY DESPITE ECONOMIC DATA ***

Mortgage rates have stopped dancing to the economy's tune lately. This means that despite stock market wobbles this morning and a housing starts report that proved disappointing (these would normally increase demand for bonds and mortgage-backed securities and push rates down), mortgage rates increased very slightly. Why does this happen? It's a supply and demand thing. When lenders have as much business as they can handle, they turn off the flow by increasing interest rates. That's why, even though they all pretty much get their money from the same place, different lenders can price loans very differently at any given time. Which makes shopping for your mortgage rate so important.

If closing in the next 7 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.