Mortgage rate lock recommendation: February 29, 2012

Posted by  on Feb 29, 2012

The Conference Board, a private research group, announced its consumer confidence index for February was 70.8, compared to 61.5 in January. The Dow Jones Industrial average closed above 13,000 on February 28, based in part on this news. The last time the Dow Jones closed above 13,000 was May 19, 2008.

The Bureau of Economic Analysis (BEA) report on GDP should send the stock market up again today, particularly since the National Association for Business Economists (NABE) announced on February 27 that they expected GDP to rise by 2.4 percent in 2012. The BEA estimated today that GDP rose by 3.0 percent in the fourth quarter of 2011.

While positive economic news is welcome, the improvements tend to lead to a rise in mortgage rates. According to HSH.com, today's mortgage rates for a 30-year fixed-rate mortgage rose to 4.24 percent on average.

If closing in the next 45 days, I would LOCK my rate. Otherwise, I'd 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.



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