With worries about Fannie Mae and Freddie Mac looming over the banking industry, the best bet for homebuyers now is probably to lock in a mortgage rate while the scenario plays itself out.
Industry analysts say evaluating which way mortgage rates will trend over the long term will be tricky because of all the unknowns regarding Fannie and Freddie, the two mortgage giants whose capital standing was called into question last week, setting off a market frenzy.
That’s why it makes sense now to play it safe and grab current rates while you still can. A 30-year fixed was going for 6.09 percent Monday, according to Bankrate.com.
“It is my recommendation that as soon as you basically know that you have found a property or are approved for a loan you should go ahead and lock in,” says Arnold Martin, president of Absolute Lending and Mortgage in Fayetteville, Ga. “Right now you have a much better chance of closing that loan if it is locked. If that loan is not locked a lender has much greater opportunity to say, ‘I’m sorry this is no longer going to be available.’ You may have to go out and buy a whole new loan.”
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