The answer to this question is very important and really only can be made by you. The problem is that deciding when to “lock” your interest rate for your loan can be a very confusing decision. As a mortgage professional, I understand that you want to catch the rate at its lowest point during the time your loan is in process. However, that is “easier said than done”. Even professional economists are not able to predict the market with accuracy.
Wallstreet has replaced the traditional bank and now pulls the purse strings of this vast mortgage market via “mortgage backed securities”. MBS’s are traded in the free and open market everyday just like stocks and bonds. The movement of interest rates in the mortgage market is directly related to the buying and selling of the Mortgage Backed Securities on Wall Street.
An important fact to remember about your decision to “lock or not to lock” is that both your commitment and ours are made on the “good faith” of the participants involved. We feel that a promise made is a promise kept, regardless of which way the market moves after the transaction is made. Of course, all of us as consumers would like to be guaranteed the very best rate in an excalating market and also have a low rate offered in a declining market. Unfortunately, the market cannot provide this assurance in the normal course of business.
If you choose to “float” your rate, you are at the mercy of the market and your interest rate could improve from the time your application was taken or rise as market conditions deteriorate.
If you choose to "lock", we will keep our side of the agreement and deliver the agreed upon rate so you will not have to second guess your decision.
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