Timing Your Mortgage Rate Lock To Get A Better Mortgage Rate

• Tweet

What's the difference between a good mortgage rate and a great mortgage rate?  Timing.

Mortgage markets have been a strange animal lately.  Because nobody's 100% certain about the country's economic future, markets -- and therefore rates -- are moving like Elaine Benes.

The catalyst for rate changing is when market sentiment makes a wide shift.  Since late-June, there's been 5 such days on which sentiment has gone favorable toward bonds.

Assuming 37.5 basis points to equate to roughly 0.125% in rate, we can see how the rallies have been good for rate shoppers.  Remember, rates and prices move in opposite directions so when prices go up, rates go down.

But we're not here to talk about the good days. We're here to talk about the bad days -- the days after.  For rate shoppers, it's rarely pretty.  After one day in Rally Mode, lately, the next day is a near-complete give-back.  Rates surge.

So, when you're shopping for mortgage rates, consider taking Kenny Rogers to heart.  Know when to hold 'em and know when to fold 'em.

If mortgage markets are rallying, it may be time to metaphorically walk away.  Lock that mortgage rate with your loan officer and preserve your in-the-rally pricing.  As trading patterns are showing, your next day pricing won't be nearly as favorable.

If you don't have the means to track when rates are in Rally Mode,and I can add you to my Rate Watch program. It's a program specifically designed to monitor mortgage rate locks and lock at a favorable juncture.  It's free to participate so if you know you're going to need a mortgage soon, I encourage you-- it's the best way to make sure your rate gets locked with the best possible timing.

Or, take a more passive approach to watching for rallies by following me on Twitter. I update my feed several times per day.