Thursday, December 31, 2009

FLOAT or LOCK? Phoenix Home Mortgage Interest Rate Update and Recommendation - Dec 31st, 2009

Current Pricing of FNMA 30 Year 4.5% Bond: $99.84
-9 bps (Prior Close – $99.93)

Market Update: Mortgage Backed Security (MBS) pricing is slightly lower today from yesterday's close. For a consumer, this translates into an upfront fee increase equivalent to roughly .125% 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.

Economic News: Pushing Bonds down early this morning was the Initial Jobless Claims report, which came in well below estimates and at the lowest reading since July 2008.

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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