Locking a Mortgage Rate in a Volatile Market
Your mortgage is most likely your largest debt you will have in your life. Securing your mortgage interest rate is one of the most important factors.
As an average consumer it is hard to study the mortgage market in these volatile times and accurately decide when a good time to lock into a new interest rate will be. Rates are changing multiple times a day.
The first thing you need to understand is that what is causing the rates to go up and down right now with the major banks may have nothing to do with the stock market or treasury yields or any of the other typical indicators that we can look at to try and follow the trends of mortgage rates.
2007 and 2008 were devastating years for mortgage companies. The ones not included in the over 300 that went out of business did not come out the other end of the real estate market crisis looking like they used to. Many banks have had to drastically scale down there work force to stay afloat.
As mortgage rates decrease and the demand for new loans increases the banks are finding themselves in a position of overflow. They no longer have the robust back office staff that can support millions dollars of new loans every day. To control the increased volume that is slowing down their processing turn times they are pricing themselves out of the market to deter new business while they catch up.
The rate increases are causing abrupt swings in the market place as banks raise and lower their mortgage rates to try and control their production and service levels.
The best way to ensure that you are not gambling with your mortgage rate that you will have for years is to make sure you align yourself with a solid mortgage company that can collect your qualifying information upfront and watch the market for you. That way they can capitalize on the sudden drops in rates when the banks have caught up on their loan pipelines for you.
As an average consumer it is hard to study the mortgage market in these volatile times and accurately decide when a good time to lock into a new interest rate will be. Rates are changing multiple times a day.
The first thing you need to understand is that what is causing the rates to go up and down right now with the major banks may have nothing to do with the stock market or treasury yields or any of the other typical indicators that we can look at to try and follow the trends of mortgage rates.
2007 and 2008 were devastating years for mortgage companies. The ones not included in the over 300 that went out of business did not come out the other end of the real estate market crisis looking like they used to. Many banks have had to drastically scale down there work force to stay afloat.
As mortgage rates decrease and the demand for new loans increases the banks are finding themselves in a position of overflow. They no longer have the robust back office staff that can support millions dollars of new loans every day. To control the increased volume that is slowing down their processing turn times they are pricing themselves out of the market to deter new business while they catch up.
The rate increases are causing abrupt swings in the market place as banks raise and lower their mortgage rates to try and control their production and service levels.
The best way to ensure that you are not gambling with your mortgage rate that you will have for years is to make sure you align yourself with a solid mortgage company that can collect your qualifying information upfront and watch the market for you. That way they can capitalize on the sudden drops in rates when the banks have caught up on their loan pipelines for you.
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To learn more about locking mortgage rates in this volatile mortgage market please start by viewing some real time mortgage rates.
posted by Credit Counseling at
7:21 AM
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