+1 vote
Are you expecting the mortgage rate (Fixed 30 Yrs, Conventional) to drop in the month of Jan 2018 ? I am looking to lock-in the mortgage rate for buying a new house. The contract has been signed, waiting on rate to drop to lock-in the rate. Kindly share you recommendation. The closing is due on the first or second week of March 2018.
asked Jan 15, 2018 in Conventional Loans by Swapnil

2 Answers

+1 vote
Our recommendations are available daily on The Mortgage Reports.


Understand that part of what you pay to lock in your interest rate depends on how long you want to lock the loan. For shorter periods (7 to 15 days), you often get a small discount on your loan pricing. 30 days is the standard lock period, and for locks pf 45, 60, 90 or 120 days, you'll typically pay a premium and often it's due upfront.

So one factor in your locking decision is how stable rates are. If you're 16 days from closing, you may do better waiting a couple of days and doing a 14-day lock than a 30-day lock. And while we can provide a snapshot of where mortgage rates are heading in the very short term, using financial data and government reports, we can't (and neither can anyone else) tell you where rates will be in March 2018. Mortgage rates can and do change several times a day when financial markets are very unstable, when terrorists attack, when oil prices rise, when governments threaten each other, or when bond investors decide to take their profits and run.

I suggest that if the "best rate" is super-important to you that you consider purchasing a "float down," which allows you to lock in today's low rate, and get a better one if interest rates improve before you close. If a small increase in rates could cause you to lose your loan approval, that makes a case for locking in early to make sure you don't lose your approval.

Otherwise, as of now, we are not recommending 45 or 60-day locks, which is what you'd need to close in March. But as we note in the daily recommendation, this is only what the writer (me, in that case) would do if I had my own loan in process. Your own tolerance for risk may be different from mine.

Good luck, and thank you for writing.

answered Jan 15, 2018 by GinaPogol (47,650 points)
0 votes
Rates are going up. It has been going up with no correction the past year.  With great economic news and low unemployment numbers, it is bad for mortgage rates. Also, the sky market is hitting new highs.
answered Feb 11, 2018 by GustanCho (106,540 points)

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