Thursday, December 24, 2009

FLOAT or LOCK? Phoenix Home Mortgage Interest Rate Update and Recommendation - Dec 24th, 2009

Current Pricing of FNMA 30 Year 4.5% Bond: $99.81
-22 bps (Prior Close – $100.03)

Market Update: Mortgage Backed Security (MBS) pricing is lower today from yesterday's close. For a consumer, this translates into an upfront fee increase equivalent to roughly .25% of your loan amount in order to obtain the same rate available yesterday for a home loan. A decrease in bond prices causes home loan rates and/or fees to increase.

We're still taking the float approach on slightly longer term (20-25 day) transactions. The market has been oversold but look for rates to start moving up with the ending of the Fed MBS purchase program.

Economic News: Initial Jobless Claims were reported better than expectations, and Durable Goods Orders rose in November.

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

No comments: