Some overnight news out of Europe did a small amount of damage to bond markets earlier this morning and based on market levels, Mortgage Rates were just barely weaker than yesterday.  But the damage was seen only in terms of COSTS and not in the actual INTEREST RATES that you'd see on your Good Faith Estimate.  (see "Current Market" for more details).

This is basically a "gimme" ahead of tomorrow's high-risk event the FOMC Announcement (AKA "Fed Rate Decision."  Although nothing will change in terms of the Fed's rates, markets are waiting to hear how the Fed treats the topics of additional purchases in the bond markets).

CURRENT MARKET The BestExecution 30-year fixed mortgage rate is BACK at 4.125% after having been between there and 4.25%.  Several lenders are willing to offer lower rates, but in most cases, those quotes carry additional closing costs.  On FHA/VA 30 year fixed BestExecution  is straddling  3.875% and 3.75% (no change).  Deals can be structured with lower rates, but again, you'll pay more for those, so make sure you assess the time it takes to break-even on the extra expense.  15 year fixed conventional loans are best priced at 3.375% (no change). Five year ARMs are best priced at 3.125% (no change).  Please note there can be a fair amount of variety between lenders and that this has been exaggerated by recent market volatility.

GUIDANCE: It seems like the mortgage market is sending a clear message.  Yesterday's rates were solidly lower than Friday's, but the secondary mortgage market has rallied about as much as we've seen it rally lately.  Combine this phenomenon of "running out of steam" with the upcoming high risk event of Tomorrow's FOMC (sprinkle in the fact that the rally iself is driven by overseas headlines, and those continue to create a risk of unexpected movements in the short term) and it seems like all the stars are aligning to suggest locking this afternoon is the highest probability bet.  All that notwithstanding,  we continue to favor locking due to the nearness to all-time lows.  Floating into the FOMC announcement is like rolling the dice on the market's reaction to it.  Until we see proof that the Secondary Mortgage Market can break higher than it's recent highs, we're hesitant to outright PLAN on it happening.