Monday, December 28, 2009

FLOAT or LOCK? Phoenix Home Mortgage Interest Rate Update and Recommendation - Dec 28th, 2009

Current Pricing of FNMA 30 Year 4.5% Bond: $99.47
-34 bps (Prior Close – $100.03)

Market Update: Mortgage Backed Security (MBS) pricing is lower today from last week's close. For a consumer, this translates into an upfront fee increase equivalent to roughly .375% of your loan amount in order to obtain the same rate available last week 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: There are no economic reports due out today, and in fact, the entire week is fairly slow with only a handful of reports scheduled for release.

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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