Should I float? Should I lock? - Daily Update for Tuesday, May 6, 2008

Here are the daily thoughts on floating or locking if you are asked by your clients.

As always - consult your favorite mortgage professional who will be able to offer the best advice for YOUR unique situation.

Big news of the day - Fannie Mae reports a bigger loss than expected and cuts its quarterly dividend. While this isn't exactly going to roil the markets, it certainly shows the pain is not yet over. Since there aren't any economic reports due out til Thursday (Jobless Claims), bonds will be taking direction from stocks (which in pre market trading appear to be going down).

Technically speaking - the FNMA 5.5% 30 year bond is currently above all moving averages but still trading in a tight range. Unless there is really dire news popping up, bonds will be in typical contrarian mode to stocks.

Until the current range is broken, then the best bet is to

Lock your interest rate.

To learn why one should Float or Lock -

Check out Should I float? Should I lock? & Reasons to Float or Lock