timing on getting to lock the mortgage i rate (loan, credit score, fees)

[hueimo]

is it kind of like a gamble on when to lock into the mortgage i rate? is this true? like it depends on timing, when your offer got accepted, when the closing deadline is coming up..all these factors, then when it's time to lock into the i rate, you got to pretty much leave it up to your destiny? the i rate went down these days, do you foresee it to go up soon again?

[asnssf]

well. at max you can lock the rate for 60 days. so you start looking around 2 months before your closing. if your closing date is not finalized subscribe to bankrate.com alerts. work with local agent, and ask him what you will get (bcas what you see in bankrate.com might not be the rate for YOU bcas of various factors). and if you feel rate is low, lock it.

before closing, if the rates went low, your agent can get the new rate from a diffferent lendor. you loose nothing..

[VictorBurek]

It can be a gamble, but rates can somewhat be predicted based on economic data. Rates over the last 2 days have increased by about .375% but in my opinion they are going to come back down.

I base this on several factors
1. Rates tend to be lower in the winter and higher in the summer. This has been accurate 8 of the past 10 years.
2. Rates follow inflation, if inflation is high or rising, rates increase. If inflation is dropping or low, then rates tend to follow it downward. All recent economic reports show that inflation is moderating and this is most obvious when looking at a barrel of oil.
3. When there is weakness in the economy it generally leads to lower rates. As a general rule of thumb, bad news for the economy is generally good news for mortgage rates.
4. The government is encouraging investors to buy mortgage backed securities. As these bonds are purchased, it drives there price higher and causing the yield to drop. Lower yield lower rates on mortgages.

However, we are currently in unchartered waters and nothing is acting on the fundamental data so it is much harder to predict. The best thing you can do to insure you get the best rate is keep you credit score is high as possible.

With all that being said, it is still my opinion we will have lower rates in the near future.

[GMU]

Hmm, well lately it's not looking good...I am glad I already locked in on a few loans. If for some reason they drop again, most "rate-lock" agreements allow you a one-time rate-adjustment for free. Of course, you can always find another lender and lock in with them before your closing, also.

[woodinvilleguy]

The way rates have been going lately, they are likely to be back in the 5's in the next 2 weeks. it is hurting my brain watching the rate. I'm locked at 6.375 and I enter my re-lock zone in 2 weeks. Knowing my luck the rates will stay high until just after me free re-lock period ends.

[ShanetheMortgageMan]

Yeah it has been tough watching rates increase, they've been at their highest in quite some time. Keep your eye on mortgage backed security prices and you'll have a good indication of where rates are headed.

[Bette]

There are buyers just waiting - and they want to be in the 5's. Otherwise, they'll wait.

Also, loan modifications are now happening and they see their co-worker, friend, whatever now at 5.00% fixed. So, they want that too.

[hueimo]

Originally Posted by woodinvilleguy

I'm locked at 6.375 and I enter my re-lock zone in 2 weeks. Knowing my luck the rates will stay high until just after me free re-lock period ends.

how do you relock if you are already locked? did you already get your offer accepted, contract back? what's the process of locking and relocking? any fees? time frame in between?

[hueimo]

Originally Posted by ShanetheMortgageMan

Keep your eye on mortgage backed security prices and you'll have a good indication of where rates are headed.

where do you see this mortgage backed security prices and how to tell how it effects the next rate might be?

[ShanetheMortgageMan]

Some lenders will allow a "float down" if rates get significantly better during the lock period, and usually only towards the end of the lock period. It's not standard to have a float down feature, and each lender who has one will have a slightly different policy.