Wednesday, December 30, 2009

FLOAT or LOCK? Phoenix Home Mortgage Interest Rate Update and Recommendation - Dec 30th, 2009

Current Pricing of FNMA 30 Year 4.5% Bond: $99.94
+12 bps (Prior Close – $99.82)

Market Update: Mortgage Backed Security (MBS) pricing is higher today from yesterday's close. For a consumer, this translates into an upfront fee decrease equivalent to roughly .125% of your loan amount in order to obtain the same rate available yesterday for a home loan. An increase in bond prices causes home loan rates and/or fees to decrease.

Economic News: The Treasury auction results have been average, at best, but the market was expecting disappointment, so Bond prices have been increasing this week.

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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