August 31st 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 DROP LIKE ROCKS DESPITE CONSUMER CONFIDENCE ***

The?? Conference Board reported that its consumer confidence index rose to a reading of 53.5 in August, a strong increase from 51 in July. Economists were expecting the index to come in at 50, according to consensus estimates from Briefing.com. When these data come in higher than expected, interest rates are likely to increase as investors require higher yields on bonds and mortgage-backed securities to offset expected inflation. However, that hasn't happened today. Instead, rates DECREASED substantially. Investors ran screaming from stocks and back to bonds and MBS when the Fed released minutes from its Aug. 10 meeting. The minutes raised concerns that the central bank may not take steps to support the faltering economic recovery unless conditions deteriorate significantly. Meanwhile, other happy news: The Case-Shiller index rose, indicating home prices nationwide increased 4.4% in the second quarter.

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.