The Mortgage Interest Rate Lock Advisory for September 21, 2009

The Mortgage Interest Rate Lock Advisory for September 21, 2009

Here are some of the events affecting mortgage interest rates today in Massachusetts, Maine, and New Hampshire.

What the Mortgage Backed Securities Market is Doing Today:

The price of the FNMA 30-Year 4.5% MBS coupon opened up 4/32 this morning from Friday's close to 100.63.

The price of the FNMA 30-Year 4.5% MBS coupon closed down 9/32 on Friday to 100.78 (as shown by the white line), and was down 8/32 for the week. MBS is currently trading up 5/32 at 100.66 (as shown by the blue line). Remember, on mortgage backed securities (MBSs), as the price goes down, the yield goes up - and so do mortgage interest rates. I expect that mortgage interest rates will be essentially be the same in price today as compared to Friday.

News and Events That Could Affect Mortgage Interest Rates Today:

• Leading Economic Indicators (LEI) for August - released by the Conference Board, this index revealed a 0.6% increase, slightly less than the 0.7% increase that was expected. While this is the 4th increase in a row, the LEI is down from the 0.9% increase in June and down from the 0.8% increase in July. The LEI provides an estimate economic activity over the next three to six months. This would indicate that analysts are predicting a moderate increase in economic activity over the next several months. This report had no affect on the mortgage market or mortgage interest rates this morning.

Stock markets are lower today as investors become concerned that recent gains could be a sign of a pending "bubble" in the market.

What's Happening With Mortgage Interest Rates Today:

Low to moderate volatility. Overall, I don't expect mortgage interest rates to move much and will be influenced mostly by the stock markets today.

My Mortgage Interest Rate Lock Advice for Today:

If I were considering financing/refinancing a home, I would...

• Lock if my closing was taking place within the next 7 days
• Float if my closing was taking place between 8 and 30 days
• Float if my closing was taking place between 31 and 45 days
• Float if my closing was taking place between 46 and 60 days

This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of any or all other borrowers.