Mortgage rates improved again today!

One reader commented....

"A lot of the technicalities of what causes mortgage rates to go up and down are way past me... in the past couple of weeks mortgage rates have gone down and up. I am curious what mortgage rates are expected to do in the next week or so? I am going to start the process of closing on a house in the next week or so... I am curious if there is a good day to lock in at? and what is being anticipated in regard to rates?"


Your statement implies your loan is entering the final stages of processing and must be locked in sometime in the next 7-10 days.

The timing of your home loan closing coincides with an extremely sensitive market "event".  This "event" will have great influence over interest rates in the next two weeks.

I don't know much about your credit & collateral profile, so I will assume you're a benchmark borrower.

Mortgage Rate Disclaimer  Loan originators will only be able to offer the lowest conventional and goverNment (FHA/VA) 30 year fixed mortgage rates to borrowers who have perfect credit profiles. If the terms of your loan trigger any risk-based loan level pricing adjustments (LLPAs), your rate quote will be higher. If you do not fall into the "perfect borrower" category, make sure you ask your loan originator for an explanation of the characteristics that make your loan a riskier investment. (eg. investment properties and second homes trigger an adjustment )

If you fall into this category, you should be able to obtain  financing at a rate between 4.00% and 4.25% without paying origination points (must pay closing costs). I wouldn't lock-in yet though. I would wait to see if mortgage rates continue to improve because we could see mortgage rates move below 4.00% again in the next 7-10 days.  If the recent rally fails to extend itself and your closing costs begin to rise, you should lock.  Any rate at or below 4.25% is a success.

If you have more time to float, specifically past November 3,  my insecurities surrounding the above discussed influential "event" are fading fast (November 3).  I am becoming more and more confident that the "event" will push mortgage rates back down to record lows.

I hope this conversation helps you and your loan originator make a decision together.

REMEMBER: The "best executed" lock/float strategy comes down to finding an originator who knows the loan market, studies underwriting guidelines, and just plain old gets the J.O.B done.  You have to let the loan officer earn their commission. That's how you "ride the float boat" in this environment...make sure you have a damn good skipper. Plain and Simple.