Monday, December 21, 2009

FLOAT or LOCK? Phoenix Home Mortgage Interest Rate Update and Recommendation - Dec 21st, 2009

Current Pricing of FNMA 30 Year 4.5% Bond: $100.72
-50 bps (Prior Close – $101.22)

Market Update: Mortgage Backed Security (MBS) pricing is lower today from Friday's close. For a consumer, this translates into an upfront fee increase equivalent to .50% of the loan amount in order to obtain the same rate available Friday for a home loan. A decrease in bond prices causes home loan rates and/or fees to increase.

Economic News: There are no economic reports due out today, but the rest of the week will be filled with reports due out through Thursday. Also, on Wednesday the Treasury Department will announce next week's Treasury auctions, which have added volatility in the past.

Recommendation: FLOAT

The decision to float or lock your interest rate can save, or cost, you thousands of dollars over the life of your new mortgage. Our recommendation won't apply in all situations, so if you have questions please contact us for clarification. Also, if you're considering purchasing or refinancing and you would like us to arrange your financing please contact The Krushinsky Team at 602-695-7575 or email

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