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Mortgage rates are changing at a blistering pace. If you're not locking your rate, you're losing your rate.
First, some background on mortgage rates.
Mortgage rates are "made" on Wall Street, from something called a "mortgage-backed bond". A mortgage-backed bond is a trade-able security for which the underlying assets are thousands of individual U.S. mortgages.
The most well-known issuers of mortgage-backed bonds are Fannie Mae, Freddie Mac, and the FHA.
As instruments of Wall Street, mortgage bonds have prices that are based on their supply and demand. Most supply is made by Fannie, Freddie and the FHA. Most demand is made by governments, banks, and pension funds.
In a "normal market", the number of buyers and sellers are in flux. In a market like today's -- with so much economic and geopolitical uncertainty -- the flux is exaggerated. Rates are changing faster.
Click here to get a mortgage rate quote.
Mortgage rates are like stock prices -- they change all day, every day. Rate you see in the morning won't necessarily be available by afternoon and that's because of the market.
The market changes.
In the same way that you can't buy Proctor & Gamble stock at yesterday's stock price, you can't lock a mortgage at yesterday's rates. Yesterday's rates are (literally) yesterday's news.
Heck, on most days, rates are even this morning's news.
In June, mortgage rates changed at least 3 times per day on 11 of 22 available trading days, or 50% of the time. That's way faster than normal, plus it's a huge jump from May's 19 percent figure.
For some perspective on how fast mortgage rates changed in June, look at these figures comparing June to prior months.
When rates change in less than 4 hours, it doesn't give you much time to shop around, let alone "sleep on it".
You need to know what you want, and be ready to lock it.
Part of my job is to watch mortgage rates in real-time. When I see changes occurring, I communicate those changes to my clients. It keeps me busy, for sure. But, being aware of a change is just one piece to the puzzle.
My clients are ready to act, too. They have a loan application on-file and are queued up for when mortgage rates improve. You should do the same.
But first things first. Get an online mortgage rate quote and see if you like the pricing. If you do, we can talk about your strategy and see what's next for you, including putting a plan in place to monitor the changing mortgage market.
Dan Green (NMLS #227607) is an active loan officer with Waterstone Mortgage. Email Dan ator click to get a free, no-obligation rate quote.
You can also find Dan on Twitter and Google+.
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