By now, you had to have heard about mortgage rates. They're low. Really low. Lower-than-they've-ever-been-in-history low.  So, what to do about it?

A Refinance Can Be Extra Money, Every Month

It's a Refi Boom. The biggest one we've seen in a while. Homeowners are finally pulling the trigger on new mortgages and lowering their respective monthly payments.

The press is all over the story, too. Check out some of these headlines from the last 24 hours:

• Mortgage rates set new lows for the 6th straight week (Reuters)
• Mortgage rates fall again; 30-year fixed at 4.54% (Wall Street Journal)
• Mortgage rates hit another low : 4.54% (NPR)

As compared to the start of the year, fixed mortgage rates are down over 0.500%; versus last July, they're down 0.750%. The plunge has dramatically improved home affordability for people taking advantage of the market and has also pushed home affordability into new echelons

From a payment perspective, a conforming, 30-year fixed rate mortgage is cheaper today by $41.94 per month per $100,000 borrowed versus 12 months ago.

Make Back The Cost Of A Refinance 16 Times Over

A homeowner with a $300,000 mortgage from July 2009 will save $45,295.20 over 30 years. That's more than 16 times the average cost of a refinance nationwide, according to Bankrate.com's 2009 state-by-state closing cost survey.

The return is even bigger if your mortgage is more than 12 months old.

The return on investment is huge. And, for homeowners taking the "zero cost"-mortgage route, the returns are even better. They approach infinity.  .

But, the thing is, like most good things, low rates must come to an end. And rates appear to have troughed.

After a big downhill between April and July, mortgage rates are flat since 3 weeks ago. It could mean that rates are gearing up for another drop lower, or, more likely, that rates have finished falling.  If you haven't talked to your loan officer about refinancing, it's time to make that call.

Want To Refinance Your Mortgage? Start With An Email.

If you don't have a loan officer, call or . I work in most states. I can help you figure out for what rate you're eligible, and just how much your monthly savings will be.

I answer all my own calls and emails so reach out today. When rates start rising, they're going to rise quickly.

(This post licensed and based on original content from Bring the Blog)

The hardest part about shopping for a mortgage rate is getting an actual mortgage rate.

About The "National" Rate

If you've spent any amount of  time looking for mortgage rates online, you'll find sites touting "national rates" for purchase and refinances.

The most highly-trafficked ones include:

• Freddie Mac's Weekly Mortgage Rates
• Bankrate.com's National Overnight Average
• HSH's Mortgage Rate Survey

And when people visit these sites for "rates", what they're looking is for something akin to a MSRP for Mortgages; a way to keep their lender honest about rate quotes and such.

Sadly, markets don't work that way.  You can't visit a national website for a single mortgage rate any more than that you could watch a national forecast for a single weather report.

And don't just take my word for it -- check out Freddie Mac's region-by-region breakdown. Each area of the country is broken out by its local rates and fees.  The West tends to be more expensive than the Northeast, for example, but with lower mortgage rates.

Furthermore, rates vary by individual -- a characteristic of mortgages that absolutely can't be captured in a national survey.

National surveys are quotes out of context; good for watching trends, but not much else.

There's The Base Rate, Then There's The Adjustments

When you're need an actual mortgage rate quote, the national surveys aren't going to cut it.  You're going to have to speak with a loan officer, or use on an online mortgage approval system to get it.

Even if you're the best of the best of the best with respect to income, assets and credit.

Mortgage pricing has two parts to it, similar to how you buy a suit.

1. There's the mortgage "base rate" -- the suit you buy off-the-rack
2. There's the base rate "adjustments" -- the tailoring of the suit to your fit

As for determining the base rate, Wall Street sets it and there's nothing we can do about it.

Adjustments, on the other hand, are a different story.

Mortgage rates get adjusted for all sorts of reasons.  Some of which you're probably aware of, but most you probably are not:

• What is your loan size? Smaller than $100,000? Bigger than $417,000?
• What is your credit score? Higher than 780?  Lower than 740?
• What is your property type?  Condo? Multi-unit?
• What is your specific loan-to-value? Below 60 percent? Higher than 75 percent?

And, perhaps the most overlooked reason for adjustment: In what state do you live?

Because of adjustments, it's clear that national mortgage surveys are nothing, if not incomplete.  A rate shopper's true rate is not going to be reflected at the Freddie Mac Web site, or on Bankrate.com, or anywhere else -- it can only come from a mortgage lender who's asked specific mortgage-related questions.

Get A Rate Quote You Can Take To The Bank

When you need a "real" rate quote, talk to a loan officer about it. There's too many nuances to do it otherwise.  You can get a real rate quote by calling me direct or just .

I answer all of my own email and Waterstone Mortgage's rates are always great.

Look, it's my job to bang the gong -- mortgage rates are low, folks.  I've been saying it every day for a week, both here and on Facebook.

But don't just take my word for it.  Check this video.

A Balanced, On-Air Review Of Mortgage Rates

When mortgages make the news, it tends to be stories of human interest or exorbitant interest rates.

It's rare to hear a newscaster come right out and say "now is the time to refinance your home".  It's even more rare when they get the message right.

NBC knocked it out of the park with this on-air interview.  The advice for homeowners is timely, accurate, and relevant for anyone with a mortgage. It doesn't matter if you live in Cincinnati or somewhere else -- this rapid-paced, 3-minute video is a must watch.

It's Your Second Chance To Ride The Refi Boom

If you missed the Refi Boom of November 2009, here's your second chance.  Watch the video for solid advice on finding low mortgages rates, plus knowing when you should shop for a rate versus when you should just lock one.

Other topics covered include:

• Why were the experts so wrong about rates moving higher this summer?
• How much money can you save if your mortgage rate falls by 1 percent?
• Should you think about buying a bigger home now that rates are down.

The advice offered is matter-of-fact and centered.  There is no cheerleading and the message is honest.

I like that.

Get Low Mortgage Rates Before Mortgage Rates Go Up

First things first -- you can't get a mortgage until you apply for one.  Thankfully, there's a lot of ways to apply.

(1) You can find an online form on a bank website; (2) You can walk into your local bank branch and sit down with somebody; or (3) and set up to do it by phone in 4 minutes.

All things considered, it's usually fastest and easiest to apply by phone.

Then, once we've taken the application, I'll get you an underwriting decision and loan terms within a few hours.  You can take it, or pass on it -- whichever suits you best. You can't know your choices until you check it out, however.

Mortgage rates are low and they likely won't stay that way. Already, they're up about 1/4 percent from last week. Better to act sooner rather than later.

to get started on your refinance today.

Mortgage rates in Cincinnati are low.  Really low.  Like, 30-year-fixed-under-5-percent low.

It's astounding, really.  Mortgage rates weren't supposed to drop this low but that's not stopping people from looking the mortgage gift horse in the mouth.

Mortgage Rates Are Range-Bound

Lately, we've been talking about technical trading. "Technical trading" sounds complicated but it's not.  Technical trading is all about patterns and the markets' tendency to repeat itself over time.

Ironically, technical trading can be a self-fulfilling prophecy. If investors expect a certain pattern in pricing to occur, they make trades around that particular expectation and, ultimately, it happens.

Technical trading may also describe why mortgage rates can't seem to fall too low, or rise too high.  Looking back almost a year-and-a-half, the mortgage bond market can't break a range.

But don't just take my word for it -- check the chart plotting the Freddie Mac average 30-year fixed mortgage rate between December 2008 and May 2010.

Rates break above 5.250 percent and fall below 5.000 at times, but spend most of the time in between.

Freddie Mac Mortgage Rates Aren't "Zero Points" Rates

Right now, we're below 5 percent.  Rates are terrific.  But there's a catch! The Freddie Mac rates aren't "real" rate quotes -- they're partial rate quotes.

Freddie Mac's reported rates don't account for the mandatory discount points required to actually get the rates.  The mortgage rate is only half the puzzle, in other words. To get your loan officer to give you the Freddie Mac rates, he'll ask you to pay an average of 0.7 points at closing.

Alternatively, you can opt for a zero-points loan.  This will result in the lender raising your rate by about a quarter.

Patterns Repeat And 5 Percent Rates Will Return Soon

Mortgage rates are rising. 5 percent, 30-year fixeds will be here soon.

Look at the patterns in the chart to see for yourself.  Last week, mortgage rates fell to the same low levels as 3 times before, and, each time, rates bounced right back to 5 percent:

1. March 2009
2. May 2009
3. November 2009

Oh, and also worth noting?  Mortgage rates haven't come close to that fabled "no closing costs at 4.500 percent" setup that people seem to be holding out for.  It's never existed and, based on patterns, it probably won't.  Not unless you opt for an adjustable-rate mortgage (which is fine, too).

You can send me an email about switching to an ARM if you have questions.

Lock Your Mortgage Rate Before Mortgage Rates Rise

Mortgage rates are unnaturally low today.  They will rise back to 5 percent or higher. Right now, they're less than that.

If you're scouting mortgage rates and wondering what today's pricing look like, and I'll help you get the day's rates for your individual situation.  Rates change quickly so send the email right away. Even one day too late can be one day too late.

It happened last June. Rates rose one full percent in just a week.  Really!

I answer all my own emails.  .

As a mortgage rate shopper in Cincinnati, geopolitics can either be your dream or your nightmare.

Lately, it's been the former.

Mortgage Rates React To Politics

The mortgage market is a living, breathing organism, susceptible to outside influence.

Some influences are easy for which to prepare.  We call them "calendared" events.  Things like the release of Existing Home Sales data, jobs numbers or an FOMC meeting -- these are events we know are coming and for which we can devise a rate lock strategy.

It's the non-calendared events, however, that can throw the markets for a loop.  You can't make a plan for something if you don't know it's coming.  You can only hope the market moves in your favor.

Right now, we're in the midst of a 7-week, non-calendared event.

• Late-March : Greece debt problems start to surface
• Early-April : Eyjafjallajokull erupts in Iceland
• Mid-April : Greece debt problems worsen
• Late-April : Civil unrest in Greece and PIIGS contagion fears
• Early-May : Greece contagion spreads to Eurozone

And then today, North Korea is threatening military action against South Korea.

Markets can't prepare for non-calendared events like they can a jobs report.  For example, if the jobs report is stronger-than-expected, we know that mortgage rates will rise. If the jobs report is worse-than-expected, we know that mortgage rates will fall.

With geopolitical happenings, on the other hand, we often have no basis.  Markets react on emotion rather than fact and it makes for a wild, rickety roller-coaster ride. Mortgage rates end up changing multiple times per day, and make big movements at a time.

North Korea + Eurozone = The Lowest Mortgage Rates Ever

Thankfully for rate shoppers, geopolitics have been pushing mortgage rates down. Way down.

As of the time of posting, 30-year fixed conforming mortgage rates have moved lower on the day and now successfully pushed through to their lowest levels of all-time.

Let's say it again : Of all time.

Now, this isn't true for all loans, of course. We're only talking about conforming mortgages.  Mortgage rates on many jumbo and super-jumbo loans are actually getting worse.  The same is true for certain portfolio products.  This is because mortgage rates on these products is not based on the mortgage-backed securities market -- they're based on bank-risk and bank-risk is growing.

Seriously -- Make Time To Get Yourself A Rate Quote

The problem with markets run by fear is that fear can quickly turn to greed.  And when it does, low mortgage rates start to go away.  Get in touch with your loan officer right away and find out if refinancing is an option.

If you can save some cash each month plus find a reasonable break-even point on your loan's costs-vs-savings, get it done. The math is favorable right now and you've got North Korea to thank for it.

A few pointers for getting low rates:

1. Try not to take too long in the "shopping" process. Rates can rise by 1/4 percent at a time while you're jockeying to save an eighth.  You'll lose in the end.
2. Try to call a loan officer directly and not the call center number on your statement.
3. Watch my Twitter feed for near-real time market updates. You'll want to know what the market is doing.

And, if you don't have a loan officer to call, you can always call or . I am an active loan officer, I answer all my own emails, and my rates are as low as anyone's. Make sure you mention you read my blog, too.

Mortgage Rate Velocity -- the rate of rate sheet change -- is higher than it's been all year.

Because mortgage rates have become a moving target, life is tough for folks in search of "the lowest rate available".  There's barely the time to complete your shopping before lender shift their pricing.

What Makes Mortgage Rates Change?

Mortgage rates are based on the price of mortgage bonds, plus whatever risk-based pricing applies to an individual borrower.

Mortgage bonds are bought and sold on Wall Street.  Like stocks, they price on supply-and-demand which, of course, changes minute-by-minute.  It follows, therefore, that mortgage bond pricing changes minute-by-minute, too.

This doesn't mean that rates do, though.  Instead, mortgage rates rise or fall when bond prices move by a some-number of ticks.  Usually, that number is 25 basis points.

Simplified, when the change in bond pricing passes certain threshold, mortgage rates move higher or lower. In April, that threshold was crossed a lot more frequently than in March.

Rates Now Change In The Middle Of Day. Sometimes 3 Times.

In April, mortgage pricing crossed the threshold every 4 hours, 6 minutes, on average.

For rate shoppers in Cincinnati, that stat means that the rate quote you got this morning -- from your loan officer, from your bank's website, or from wherever -- is 100% useless to you by the time this afternoon rolls around.

Pricing crossed the threshold and your rate went bad.

It also means the rate quote you took by email 2 weeks ago from that "online lender" isn't worth the pixels it's printed on. If you're shopping for mortgage right now and want to make sure you get that rate you were just quoted, the best thing you can do it lock it right this instant.

"Thinking on it" overnight only means that you'll lose it.

Shield Yourself From Mortgage Rate Velocity

I track mortgage data in real-time for my clients and summarize it to Twitter and occasionally to Facebook. It's free information and I'm sending alerts before new rate sheets are published.

Follow me online and you'll stay ahead of the market.

My alerts could save your beaucoup bucks over the life of your mortgage but being "alert" is just one part of being ready. You should also have your loan application queued up with a bank before mortgage rates start moving.

Banks won't give rate locks without applications on file.

To give an application, call my office at 513-443-2020 or . And give an application to at least 2 other loan officers, too, for purposes of "shopping around".  Don't worry -- your credit score won't be damaged so long as you shop the way I tell you to.

MRV is high and markets move quickly.  Be ready to lock and watch for reversal. The interest rate you save may be your own.

The Federal Open Market Committee starts a 2-day meeting today, one of 8 scheduled meetings for the year.  Bernanke & Co. are expected to leave the Fed Fund Rates unchanged after the meeting, but that doesn't mean mortgage rates will be unchanged, too.

Au contraire, mortgage rates will be all over the place.

Mortgage Rates Aren't Made On Capitol Hill

The Federal Reserve doesn't control mortgage rates.  Wall Street does. Mortgage rates are based on the price of mortgage-backed bonds plus whatever tiered-pricing may apply. When people in Cincinnati apply for a mortgage, it's Wall Street that sets the price.

The Federal Reserves does, however, set the Fed Funds Rate.  The Fed Funds Rate is the interest rate banks charge each other for overnight cash loans. The Fed Funds Rate is used for a very different type of loan as compared to mortgage rates.

The Fed Funds Rate is a Bank-To-Bank rate. A mortgage rate is a Wall-Street-To-Consumer rate.

In other words, the Fed can't change mortgage rates because its powers don't extend that far.

Checking The Difference Between Mortgage Rates And The FFR

Over the last 20 years, it's obvious how different the Fed Funds Rate is from consumer mortgage rates.

The spread has been as large as 5 percentage points, and as narrow as 1.

• 5.000 percent spread or more : 1992, 2002, 2004, 2009
• 1.000 percent spread or less : 1999, 2000, 2006

Furthermore, going back to 1973-1974, and 1980-1981, the spread went negative.  30-year fixed mortgage rates were higher than the Fed Funds Rate.

If the Fed Funds Rate was directly related to mortgage rates, the spreads would be linear.

However, The Fed Can Influence Mortgage Rates

The Fed can't set mortgage rates with its actions, but it can influence mortgage rates with its words.  And that's exactly what will happen tomorrow.

The Federal Reserve is the nation's central banker and when it talks about an expanding economy and inflationary pressures, it causes bond markets to sell off which, in turn, causes mortgage rates to rise.  Similarly, "down" statements on the economy tend to draw rates down.

The Fed will issue a statement at 2:15 PM ET Wednesday and when it does, mortgage rates will react.  Not because the Fed Funds Rate is different, but because the Fed's press release will highlight the economic strengths, weaknesses and threats to the U.S. economy -- the exact things that make bond markets move.

Today is not a good day to float your mortgage.

A Rate Lock Strategy For The Federal Reserve

If you're not locked in, talk to your loan officer ASAP. There's very little room for rates to fall, and plenty of room for rates to rise. It's a gamble on which you don't want to be on the wrong side.

Or, if you don't have a loan officer, with your details. I'm happy to prequalify you when you're ready.

One of the most common questions I hear as a loan officer is "What's your rate?" It's an impossible question because there's no clear answer.

"The Rate" depends on "The Product".

Not All 30-Year Fixeds Are Created Equal

For an excellent illustration of how rates vary by product, compare the average reported interest rate for the FHA 30-year fixed rate mortgage to average reported interest rate for the conforming 30-year fixed rate mortgage.

Over the last 5 years, there's loose correlation; trending together, but rarely equal.

The rate differential has been stark at times:

• May 2006 : 30-year FHA mortgage rates were better by 0.88%
• January 2009 : 30-year conforming mortgage rates were better by 0.95%

Today, the two products are separated by about a quarter-percent.

FHA And Conforming Mortgages : Key Differences

I've been in this business long enough to know that people tend to assume a 30-year fixed is a 30-year fixed is a 30-year fixed.  It's not true.  It's like saying a car is a car is a car. There are features and traits that make each product unique.

FHA and Fannie/Freddie both back products known as "30-year fixed rate mortgage", but beyond their respective 30-year amortization schedules, they're hardly alike.

The FHA requires up-front mortgage insurance and a monthly premium. It requires a 3.5% downpayment, allows ample seller concessions and is strict on "as-is" homes.

FHA home loans can be assumed by a subsequent home buyer.

By contrast, Fannie Mae and Freddie Mac assess upfront fees for high-risk borrowers and don't require mortgage insurance with a 20% equity stake. Downpayments start at 5 percent and rates tend to improve as equity percentages increase.

Which Is Better : FHA Or Conforming 30-Year Fixed?

"Which is better : FHA or Conforming?" is another common question I field.  The answer is "it depends".  Even for FHA homeowners thinking about a streamline.

There's been several instances this month where it's made more sense for my clients to refinance into a Fannie Mae or Freddie Mac product than to streamline refinance.

The new FHA funding fees really change the math.

As a basic rule of thumb, try this chart:

• Downpayment of 4.99% or less : .
• Downpayment of 5.00-19.99% : Ask your loan officer for a recommendation
• Downpayment of 20% or more : .

Of course, the rules won't apply in all situations so make sure to do a sanity check with your loan officer -- just in case. You're also welcome to with the details of your situation. I'll help how I can.

Life is getting difficult for home buyers and rate shoppers.  Since the start of April, mortgage lenders are averaging 2.25 rate sheets per day.

Mortgage Rate Velocity -- the pace of rate sheet change -- is as high as it's been in a year.

What Is A Mortgage Rate Sheet?

A rate sheet is a mortgage bank's "menu". It lists rate-and-points combinations for every loan product available. Some rate sheets are just a page; others go 10 pages or more.  Most are now electronic.

Rate sheets show the "right now" pricing on 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
• 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, lately, markets have been wild.

Mortgage Rates Are Changing Every 3 Hours, On Average

In January, mortgage rates changed every 6 hours.  Since late-March, however, they've changed every 3 hours.

That's two times as fast.  There's no "calling you back in the afternoon" or "thinking about it overnight" in a market like this.  Unless you're watching real-time market updates, it's pretty much a guarantee you'll get burned.

Want that rate you were just quoted? You better lock it right this second.

It's Going To Get Even Worse For Rate Shoppers

The pace of change in April is just the beginning. By June, today's Mortgage Rate Velocity will be look tame; as a turtle to a hare.

The Fed is officially gone from the mortgage market and its absence has left markets in doubt.  The Fed was a stabilizer, if nothing else, and with it gone, there's questions about whether investors will step up to fill the demand void. Especially because stock markets are throwing better returns and debt concerns are easing around the world.

Mortgage bonds fared well in 2009 because the world was on fire. This summer, that won't be the case. Mortgage Rate Velocity will eclipse its all-time highs.

Shield Yourself From Mortgage Rate Velocity

As a loan officer, I track mortgage data in real-time, and summarize it online to Twitter and occasionally to Facebook. I send alerts to my audience before new rate sheets come out so everyone can stay ahead of the market.

You need to be plugged in. If you manage them right, my alerts should save you tens of thousands of dollars over the life of your mortgage. It'd be silly not to pay attention, really.

However, being "alert" is only one part of being ready. You must also have a loan application on file with your lender.

Banks can't give rate locks without full applications.

Applications-by-phone are a 4-minute process.  To give one, call my office at 513-443-2020 or . And be sure to give applications to other loan officers, too.  Don't worry -- your credit score won't be damaged if you do it the right way.  Plus, you'll have some comparison points for pricing.

Then, when it's time for you to lock, you'll be glad you were ready. Markets move quickly and your mortgage is a huge financial instrument. It's not something to gamble with.

My longtime readers are familiar with the proverbial Mortgage Rate Roller Coaster. It's my way of explaining how mortgage rates rarely move in a straight line.  Some days up, some days down, every day unpredictable.

See for yourself how volatile rates can be.

Mortgage Rates Can Make You Nauseous

In this true-to-life mapping, ride the coaster as it plots the Fannie Mae 5.0% bond against a wooden-frame rail track, beginning on November 25, 2008 and ending March 31, 2010.  This period represents the time during which the U.S. government spent $1.25 trillion to keep mortgage rates low.

During that period, conforming 30-year fixed rates carved out a range of 1.75 percent and changed up to 5 times per day.

The Fed's Buyback Program Worked (For Now)

Insiders estimate the Fed's program lowered mortgage rates 1 percent. Other factors may have helped them fall more. Rates peaked in June 2009 and bottomed in November 2009. Today, 30-year fixed conforming rates are approximately 1.125 percent lower than when the mortgage buyback program started.  ARMs are even more improved.

The Mortgage Rate Roller Coaster is 100% built-to-scale.

You Should Know When To Lock Your Rate

I'm an active loan officer and I am licensed to lend in the majority of the United States. If you have questions about mortgage rates, mortgage rate volatility, or timing your upcoming rate lock, to send me an email.

I answer all my mail and look forward to helping you.

Mortgage rates tend to climb with the mercury. It's been the case in each of the last 4 years.  As spring months turn into summer, the average 30-year fixed mortgage rate rises.

This year should be no different.

The Environment Is Ripe For Rates To Rise

With mortgage rates artificially suppressed -- domo arigato, Mr. Bernanke -- and U.S. inflation expectations at a minimum, the current mortgage rate environment is extremely consumer-friendly. Few people expected 5.000 percent rates to be available this late into a recovery.

But with the economy showing signs that recovery is sustainable, pressure is on for rates to rise.

• Retail Sales data shows consumers are out spending again
• Job growth gets closer to net positive, month-by-month
• Home values have stopped falling, and, in some markets, are rebounding

Each of these factors draws money out of the relative safety of the bond market and into the riskier world of stocks.

Furthermore, the price of gas is rising.  It's up 20 cents per gallon in the last 30 days. No doubt you've noticed. Rising gas prices are inflationary and when gas prices rise, we find that mortgage rates are usually right behind.

The Fed's Buyback Program Ends 8 Days From Now

There's another reason for rates to rise this season, too.  It's the Federal Reserve's mortgage buyback program.

More specifically, its pending ending.

The Fed's buyback program was, by most accounts, a success.  Rates are an estimated one percent lower than they would have been without the Fed's intervention, and the rate drop happened without much disruption in day-to-day mortgage market trading.

However, the Fed's program ends next week.  March 31, to be exact.  And when the Fed leaves the market, there's going to have to be someone to pick up the slack demand or else mortgage rates will have nowhere to go but up. This is because mortgage rates move opposite of mortgage bond prices.

Yields rise as a result.

Beware Of Inflation

Inflation expectations are low for now, but that can change quickly.  It only takes a series of strong economic data to make Wall Street question what's really ahead for the U.S. consumer.  Inflation is the enemy of mortgage rates and its presence makes rates rise.

Therefore, use the mortgage rate chart to your advantage.  You can see what's happened to mortgage rates in each of the last 4 summers -- 2010 should  follow suit.  And when the mortgage market turns for the worse, it's going to turn quick.  Be ready for it.

Get Locked In March Or April

and we can talk about your mortgage situation -- purchase or refinance.  You don't need to lock a rate today -- you just need to be ready to get it done because when it's time, it's time. As soon as you notice rates are higher, it'll probably be too late to do anything about it.

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)

People search for mortgage rates on Google.  That's not news.  They type in something like "Cincinnati mortgage rates" and then comb through the results in search of "today's rate".

Except Google doesn't give rates. Google gives links.

Links to random websites or elaborate sieves meant to capture eyeballs and generate applications.  The problem is, most people shopping for rates just want information -- they don't want to be sold something. Not yet, at least.

You can't window shop for mortgages on Google

You can't window shop Google for mortgage rates and it's frustrating.

This is because searching for a mortgage isn't like searching for a book.  You can't eliminate the information asymmetry inherent in mortgages; know the price before you step in the store, so to speak. You really can't know if you're getting the "guaranteed lowest rate".

In the mortgage markets, prices are elusive.

However, in doing the research, people learn a lot about mortgages.

• They learn that mortgage rates are based on mortgage-backed bonds and not the 10-year Treasury Note
• They learn how changes in the Fed Funds Rate change mortgage rates
• They learn that mortgage rates are as ever-changing as stock prices

Beyond that, though, it's an information abyss.

Freddie Mac's weekly survey is instantly out-of-date

When you're looking for mortgage rates, there's no crawler on Bloomberg; no ticker on Google Finance; no section in the newspaper.  Sooner or later, therefore, everyone trips into the Freddie Mac Primary Mortgage Market Survey.  It's one of the most widely-circulated mortgage rate surveys in the country.

Published since 1971, the Freddie Mac survey is the basis for national mortgage rate news, and for Home Affordability studies, and for congressional research, and about anything else mortgage-rate related.  The study is flawed in a big way, however. Huge.

The problem is in the survey's methodology.

According to Freddie Mac, Primary Mortgage Market Survey results are collected Monday through Wednesday, then published to the public Thursday. By design, therefore, the survey lumps mortgage market activity spread across 3 days into 1 single point of data.

Survey results are skewed, therefore, based on the when survey responders get back to Freddie Mac.

Last week, this point was painfully clear. Mortgage rates were down Tuesday morning, but rode the rocket higher Wednesday and Thursday.  It was the worst week for mortgage rates since late-December, actually.  And Freddie Mac missed it -- its survey was compiled before rates went bad.

So, Freddie Mac reported 30-year fixed mortgage rates down by 0.04% from the week prior.  Real mortgage pricing, however, showed rates up three-eighths.

A workaround : How to find actual mortgage rates online

What's a rate shopper to do? Well, for one, stop looking for rates on Google. Consider giving applications to a handful of loan officers and let them track your rates for you. A loan officer can (and will) tell you about your real-time pricing if you ask.

Next, add my Twitter feed to your "online research" library. If you've never been on Twitter, it's ridiculously easy and you can have my near-real-time updates pumped right to your mobile phone, if you'd like.

And, lastly, remember that mortgage rates change all day long. A quote issued in the morning won't be valid in the afternoon.  You have to stay on your toes if you want be ahead of market changes and lock the best possible rate.

In Cincinnati or anywhere else.

(Image adapted from Freddie Mac)

Science experiments can be excellent metaphors at times.

Thursday, shortly after the markets closed, the Federal Reserve announced a 25 basis point increase to the Discount Rate.  The Discount Rate is now 0.750%. Mortgage markets are selling off on the news.

The Era of Low Mortgage Rates may be officially over.

The Psychological Impact Of The Discount Rate

For some context, it's important to understand what the Fed's Discount Rate is and, more specifically, what it isn't.

The Discount Rate is the interest rate that the Federal Reserve charges to banks when banks borrow money from it. Banks typically borrow money from the Fed to beef up their cash reserves because all banks are required to keep as minimum level of cash-on-hand.

The Discount Rate is not the rate at which banks borrow money from each other -- that's the Fed Funds Rate.  Nor is the Discount Rate the benchmark rate at which banks lend money to consumers and businesses -- that's Prime Rate.

Discount Rate is just one of the Fed's many tools to slow or speed the economy and, as of yesterday, it's taking steps to slow growth down.  Or, at least, push some responsibility back to banks.  There's no direct impact on consumers for a move like this, but it's the indirect impact we need to worry about.

In raising the Discount Rate, the Fed implies that the U.S. is strong enough to withstand a shock.  It's the signal for which Wall Street has been waiting.

Mortgage Rates Are Breaking Higher

See, since late-2008, 30-year fixed mortgage rates have moved within a very tight range. With few exceptions, never more than 5.375% and never less than 4.875%.   This was because the bond markets harbored doubt about whether the "green shoots" of the economy were for real. Yesterday, the Fed answered that "Are We?" and "Aren't We?" question.

Clearly, we are.  And that brings us to the science experiment.

Much like a super-saturated solution, the mortgage-backed bond market has been in precarious balance, one crystal away from complete transformation.  Well, Thursday, February 18, 2010, the Fed introduced that crystal.  Loan officers everywhere will forever remember yesterday as the Last Day of Low Mortgage Rates.

What To Expect From Your Loan Officer

The Federal Reserve won't make policy changes over the next few weeks, months, or maybe even quarters, but the damage is done. Bond markets are played 12-18 months into the future and the Fed's move to raise the Discount Rate has traders to change their expectations what's coming down the pipe.

Mortgage rates will rise in response.

If you're in the process of shopping for a mortgage or buying a home, the longer you wait to commit, the higher your mortgage rate will likely be.  Call or and I will send you a rate quote based on what the market is doing today.

Rates are changing very quickly and every day counts.

Mortgage rates regained a sense of calm last month as markets recovered from a tumultuous December.  After shedding 300 basis points to close out 2009 -- that's 3 discount points per loan, by the way -- January's pricing recovered by nearly two-thirds.

Rates eased lower day by day in the first month of 2010 and, more importantly to rate shoppers, rates were mostly steady.

On average, mortgage lenders issued just 1.4 rate sheets per day in January, or 7 per week. Mortgage rates haven't been that stable on day-to-day basis in 10 months.

But first, a definition: What is a rate sheet? A rate sheet is a mortgage lender's pricing menu.  Rate sheets lists the rate-and-fee combinations for every mortgage products under the sun, including:

• 30-year, 20-year and 15-year fixed rate mortgages
• 5-year, 7-year and 10-year adjustable rate mortgages
• All variations of jumbo and super jumbo mortgages
• The complete line of FHA and VA mortgages
• Loans for condotels and non-warrantable condos

If a lender offers it, it's on a rate sheet.

The very nature of mortgage markets means that rate sheets are in constant flux.  It's why a mortgage rate is rarely good for more than a few hours.  Similar to beef or lobster, "market price" changes all the time. You can't rely on last night's menu.

New day, new costs and if your current Good Faith Estimate and/or rate quote is older than 5-and-a-half hours, it's officially outdated. Lenders won't honor it.  It's time to start again.

Now, the good news is that rates are relatively tame.  Getting 5 hours-plus to lock a rate is a gift from the Mortgage Gods.  Unfortunately, though,the last time rates settled in like this, it was just a brief calm in a turbulent time.  Sort of like the eye of a hurricane.

From last March, you can see the "V" shape in the chart above. I suspect we're in a similar situation now.

The economy is recovering quickly, corporate earnings are booming, and the Fed is withdrawing its support for the mortgage market. Sooner or later, mortgage markets are going to sell off.  It hasn't happened yet because demand for U.S debt has been high.

But, as the global economy emerges from this generation's worst recession, investment dollars will even out between the U.S. and elsewhere and, when that does happens, it's yet one more reason for rates to jump.

You'd best be ready for it.

As a loan officer, I watch real-time mortgage market data that's not published to the papers or on TV. If you need to know what rates are doing, you need to be watching my Twitter stream, or following me on Facebook. I post regular updates and tend to alert before rate sheets change.

If you need to lock a mortgage rate, make sure you're getting my updates.

Furthermore, if you're actively rate shopping for a home in Cincinnati, Chicago, or somewhere else that I lend, make sure you ask me for a rate quote. Because I work for a self-funded bank, my rates and fees are often less than my broker peers and especially better than the correspondents.

Be sure to ask me for . I love to work with my readers.

If you want to know where mortgage rates are headed in the future, you may be better off ignoring the experts.

I conducted a 50-week study of the popular Bankrate.com Mortgage Rate Trend Index and it showed that the "expert consensus" on mortgage rates is wrong 3 times more often than it's right.

I am a regular Rate Trend survey participant and have been since 2006.

If you've never seen Bankrate.com's weekly Mortgage Rate Trend Index, it's an informal "future of mortgage rates" poll of loan officers around the country. It's meant to give interest rate guidance to active home buyers and would-be refinancers.

Many survey participants are high-profile and the mortgage rate question posed by Bankrate.com is a basic one:

In your opinion, will mortgage rates move up, down, or remain unchanged 35 to 45 days from now?

Well, mapping the Bankrate survey's majority opinion against Freddie Mac's published mortgage rates 35 days hence, it turns out that the experts guessed right on rates just 23.4% of the time last year.

That's seriously awful. It's less than 1 out of 4. And they're experts.

Now, to be fair, some of the participants fared better than the average including Bankrate.com host Holden Lewis and yours truly. However, predicting mortgage rates remains a huge challenge. Especially 35-45 days into the future.

A lot can change in 6 weeks and last year, a lot did. As the economy dipped and surged, Wall Street tried to come to terms with the future of the economy while Congress and the Fed made new policies to stimulate and/or retard growth, as needed.

Intervention messes with markets and mortgage rates were extremely volatile during the sample period. This is because the mortgage rate that homebuyers see is the result of literally hundreds of factors.

Lenders averaged 1 middle-of-the-day rate change per day last year. That's a lot.

Despite these caveats, though, none of it changes the fact the Bankrate.com survey was actually de-helpful to its readers last year. Homebuyers that relied on the survey for rate lock advice, in hindsight, would have been better off flipping a coin.

According to Bankrate.com, the Mortgage Rate Trend survey is among its most viewed pages on its site. Plus, the survey is syndicated to sites like Yahoo! Business and Fidelity Investments.  Clearly, a lot of Americans are using this thing for rate-locking advice.

It's too bad, really, because the advice they're getting is hardly ever right.

When you need to lock a rate, remember that predicting mortgage rates is a challenge for anybody and the farther out an expert goes on the time line, the more likely his logic will be proved wrong.  Markets and makeup change way too fast.

As a consumer, therefore, the best thing you can do is work with a loan officer that understands how markets move and why they move.  You may not get the best prediction for a rate 2 months into the future, but you'll get an excellent take on what's driving mortgage rates today -- an equally important set of information.

Then, when you can get a heads-up on when rates are rising before it actually happens, that's when you can save yourself some money.  The key is to work with a loan officer that tracks real-time mortgage market data and, more importantly, knows what to do with it.

If you're working with a Call Center-type lender, or just aren't sure whether your loan officer is up to snuff, call or . I track mortgage rates in real-time for all of my clients and I love to work with my blog readers.

Plus, my rates are really good (even if I can't predict them 45 days into the future).

Like in 2006, 2007 and 2008, Autumn 2009 is marked by falling leaves and falling mortgage rates.

The trend looks more like a pattern.

Based on Freddie Mac data of the last 4 years, 30-year fixed mortgage rates rise from January through August, and fall through fall. There's 6 weeks left until January.  The clock may be ticking for today's home buyers and rate shoppers.

Conforming and FHA mortgage rates are sub-5 percent right now and, by most measures, there's no good reason for it.

• The U.S. dollar is extremely weak -- usually a negative force on mortgage rates
• The price of gold reflects a healthy fear of inflation -- usually a negative force on mortgage rates
• The stock market is on a tear -- usually a negative force on mortgage rates

Furthermore, the economy is no longer in free-fall which is the scenario that dropped rates below 5 percent in the first place.  Mortgage rates are poised to rise and, when they do, they'll rise in a hurry.

See, that's the other trend in mortgage rates.  Rates rise much faster than they fall.  Just ask anyone on the wrong side of the Memorial Day Massacre about how that turned out.   As low as rates are now, we could be looking at 7 percent mortgage rates in a flash.

Timing mortgage markets is unpossible.

As a homeowners, it's easy to keep up with rate trends on a weekly basis with the newspaper or the aforementioned Freddie Mac data, but markets move faster than that.  They're minute-by-minute and ever-changing.  Unfortunately, laypersons don't get access to mortgage bond data for free.  Even the U.S. Treasury market fails as a proxy anymore.

So, to keep up with rates as best you can -- follow my feed on Twitter or fan me on Facebook. I post near-real-time mortgage market updates several times per time  and I usually post advance notice on rate changes for the worse.

You can also get a feel for what rates are doing right now by using the "Rate Offer" form at the top-right of this page. If your situation needs more than 8 fields to summarize, .

I answer all my own mail.

If history is an indicator, mortgage rates should ease a bit into 2010.

Data from Freddie Mac since 2006 shows that 30-year fixed mortgage rates tend to rise during the summer months, and fall through the fall.

So far, 2009 is staying true to form.

After a post-Memorial Day mortgage rate run-up, the 30-year fixed idled through June, July and August.  And then, on Labor Day, as if on cue, Cincinnati homeowners caught a break.  Mortgage rates began to drop.

By the first week in October, rates had returned to early-May levels, the damage of the summer unwound.

But for homeowners in want of a refinance, 2009 may not be the year to wait on lower-rates-to-come.  This year -- this year in particular -- is very different from the 3 years prior.  This year, the economy is emerging from recession as opposed to entering one.

Today's market environment is distinctly different from what we're used to.

1. The Federal Reserve is ending its mortgage market support instead of beginning it
2. Legitimate concerns about inflation are resurfacing on Wall Street
3. World economies are showing signs of life, spurring global equity investment
4. The U.S. Dollar is sagging against other currencies, devaluing mortgage bonds

Individually, these events exact a measurable, upward force on mortgage rates.  Together, they could completely wreck today's low-rate environment.

We could be looking at 7 percent mortgage rates in a flash, or rates could ease into the New Year.

Either outcome is plausible and that's why timing a market bottom is so challenging.

As a rate shopper, it's important to know what markets are doing at any given moment.  Unfortunately, there's no authorized source that gives the information for free.  Even the U.S. Treasury market fails as a proxy anymore.

So, to keep up with rates on your own, do it the free way -- follow my feed on Twitter or fan me on Facebook. I post near-real-time mortgage market updates several times daily and -- because I know how the banks play The Rate Game -- I post advance notice about when a rate change is about to happen.

Generally, I'm giving about 15 minutes notice.

You can also get a feel for what rates are doing right now by using the "Rate Offer" form at the top-right of this page. If your situation can't be summed up in 8 simple fields, .

Thursday, Freddie Mac published its weekly mortgage market survey.

The report showed 30-year fixed mortgage rates sub-5 percent, near all-time lows.  Versus October 2008, they're down 1.07%.

The press was eager to report a story like this -- mostly because anytime mortgage rates below 5.000 percent, it makes for good copy.

But for rate shoppers in Cincinnati and Chicago, by the time Friday's business section was delivered, the Freddie Mac survey was woefully out-of-date.  Mortgage rates had already started to rise on a series of newsworthy notes:

• Australia lifted its interest rates, the first major economy to make a move like that
• Members of the Federal Reserve hinted that the Fed may raise rates soon
• Concerns of inflation crept back into the Wall Street psyche

Combined, these elements led to a furious mortgage market sell-off so that by 4:00 PM ET Friday, mortgage rates were posting 3/8 higher than what Freddie Mac said they should be.

Rate shoppers get angry when stuff like that happens.  And, it seems to happen a lot.

Weekly surveys like the Freddie Mac report are good for watching long-term trends in mortgage rates, but they stink for when you need immediate "Lock or Float" advice. Remember, mortgage rates change every few hours so rate surveys are often "stale" before they're even published.

One easy (and free) way to track what's happening with mortgage rates is to fan my Facebook page and/or follow me on Twitter. I post markest updates several times per day and often alert before rates get worse.

From the time I advise to lock rates, you'll generally have less than 15 minutes to contact your lender and commit.  If you've already got a loan application on file, that's plenty of time to execute the trade.

If you don't have an application on file, though, or have trouble reaching your loan officer at a moment's notice, your chances of locking the rate drop dramatically.  It takes time to give an application, issue an approval, and position for locking.  It can take even more time for a lender to check his voicemails and return a call.

Mortgage rates wait for nobody.

I monitor and lock mortgage rates for my clients and do it with an automated system. If you're not getting the service you want or expect from your current lender, call or . I'll manage your rate lock for you and can probably save you some money in the process, too.

This is a short list of things that don't control mortgage rates:

1. 10-Year Treasury Note

Over long periods, the 10-year treasury trends with mortgage-backed securities. On any given day, however, the two can move in opposite directions. You can't watch the 10-year ticker on TV and think you know where mortgage rates are going.

2. The Fed Funds Rate

The Fed Funds Rate is the rate at which banks borrow from each other overnight. A mortgage rate, by contrast, is the rate at which a homeowner borrows from a lender. If the Fed Funds Rate and mortgage rates were connected, this chart wouldn't be so jagged.

3. Ben Bernanke

Ben Bernanke is the Chairman of the Federal Reserve, the group that sets the Fed Funds Rate. His influence on mortgage rates, therefore, is muted. However, Bernanke's Fed has been a buyer of mortgage bonds in 2009 so its influence on rates is somewhat elevated. The buying schedule ends in March 2010.

4. Congress

Congress can sway mortgage markets with policies and rhetoric, but as the legislative branch of the U.S. government, its influence on mortgage rates remains indirect. No matter what it says or does to influence the economy, it's still the traders in the mortgage markets that have to take the bait.

5. Chuck Norris

Although Chuck Norris can beat a brick wall in a game of tennis, his legend is no match for mortgage rates. When markets decide they want to rise, they rise.

There's only one thing that controls mortgage rates -- the price of mortgage-backed bonds. Unfortunately, there's no publicly-available tool to watch how mortgage-backed bonds are changing on an hour-to-hour basis.

As a loan officer, I pay for a premium data feed to track mortgage-backed bonds in real-time. I post semi-regular updates to my Facebook Fan page and to Twitter.

For some people, though, that's not personal enough and I understand.

If I can ever help with your individual rate lock decision or to act as a sounding board for your mortgage ideas, . I answer my emails personally and am happy to help you with strategy.