|30 Year FRM||5.01%||Better by .04|
|15 Year FRM||4.48%||Better by .04
|5/1 Year ARM||3.95%||Better by .03
|Jumbo 30 Year FRM||6.02%||Better by .02
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.
CONSUMER CONFIDENCE DOWN, MORTGAGE LENDERS REPRICING FOR BETTER. The Conference Board reported that its Consumer Confidence Index (CCI) for October plummeted to 47.7, sharply down from the 53.5 that was expected. Going into the holiday season, it appears that consumers are less optimistic about their finances than experts had supposed. That is good news for bonds and mortgage-backed securities (MBS) because it means that consumers are less likely to spend money, slowing economic growth.
Tomorrow brings several economic reports--September's Durable Good Orders, September New Home Sales, and a Treasury auction of 5-year notes. If the news is bad and the sale goes well, rates could drop further tomorrow afternoon. However, if the notes get a lukewarm reception, MBS could be priced higher and mortgage rates could increase.
The case for locking in your rate today is strong, especially if your mortgage approval depends on keeping the rate low. If closing in the next 60 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.