Mortgage rate lock recommendation: March 5, 2012

Posted by  on Mar 05, 2012

Mortgage rates are expected by HSH.com to rise slightly this week, but today the average mortgage rate on a 30-year fixed-rate home loan is 4.24 percent, down very slightly since Friday. The modest increase is expected due to better economic news, although manufacturing reports were not quite as good as expected late last week.

The bigger news is that higher fees for FHA loans and Fannie Mae and Freddie Mac loans are set to begin April 1. According to HSH.com, when lenders pass on the higher fees for Fannie and Freddie mortgages to their customers, the mortgage rate is likely to be about one-eighth of a percent higher.

If closing in the next 60 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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