Mortgage rate lock recommendation: March 1, 2012

Posted by  on Mar 01, 2012

The Federal Reserve's Beige Book, which takes a broad look at economic indicators in each region of the country, shows that the economy is moderately improving. Declines in joblessness, improvements in the manufacturing sector and even some progress in the housing market may lead to higher mortgage rates over the next several months.

Today, though, HSH.com reports that average mortgage rates declined a bit to 4.20 percent for a 30-year fixed-rate home loan and 3.49 percent for a 15-year home loan.

The bigger news for new FHA borrowers is that insurance fees are rising April 1. While it may be too late for purchasers, if you are looking for a mortgage refinance and already have an FHA loan, you may want to apply for a streamline FHA refinance today to beat the coming higher insurance rates.

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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