Mortgage Pricing Gets Unpredictable. It’s Time To Lock Your Mortgage Rate.

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Mortgage rates were more volatile in February than in January, making mortgage rate shopping a little bit more difficult.  Lenders averaged 1.55 rate sheets per day.

What Is A Mortgage Rate Sheet?

A rate sheet is a mortgage bank's "menu". It lists the rate-and-points combination for every product available. Some lender rate sheets are 1 page long; some are 10 pages or more. They include prices for products including:

• 30-year, 20-year and 15-year fixed rate mortgages
• Short-term ARMs like 1-year and 3-year products
• Long-term ARMs like 5-year, 7-year and 10-year products
• All variations of jumbo and super jumbo mortgages
• The complete line of FHA and VA mortgages
• Loans for condotels and non-warrantable condos

Rate sheets change with the market and although last month's rate sheets were relatively change-free as compared to last summer, there were some interesting footnotes.

Under The Surface, Not So Tame

February's mortgage market could be categorized as "on edge". For the most part, rates didn't change intra-day.  It was common for lenders to issue rate sheets in the morning and stick to their pricing through market close.

In February, rates held firm 13 out of 20 days -- 65% of the time. That's more than double December 2009's frequency and the highest of the last 2 years.

On days in which rates did change, though, they changed a lot. There were two days on which rates changed 3 times and one day on which rates changed 4 times.

Prior to last month, we hadn't seen a 4-sheet day since October 2009.

Mortgage Rates Will Change Rapidly In March

As the United States fortifies its economy with slow, steady growth, and as the Federal Reserve withdraws its support for mortgage markets, mortgage rates are poised to spike.  However, sporadic reports of economic weakness have undermined that eventuality.

If you've been floating a mortgage rate in 2010, you've played with fire and not been burned. Going forward, get out the turnout gear. Rates are going to rise -- and they're going to rise quickly.

Be ready for it because you won't see the rate hike in the news until it's too late.  You won't see it in real-time.

But I will.

Get Rate Sheet Updates As They're Happening

As a loan officer, I track mortgage data that's unavailable to the public, and I summarize it online via my Twitter stream and occasionally on Facebook. I send alerts before new rate sheets come out.

Furthermore, if you're actively rate shopping in Cincinnati or Chicago or somewhere else that I lend, make sure to. I work for a self-funded bank and my bank's rate sheets are often cheaper as compared to my peers.

(Author's Note: Thank you, Jake Planton, for your help with research)