Top 10 Truths: Mortgage Interest Rates

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Here are the top 10 insider tips about mortgage interest rates.

  1. Mortgage interest rates change daily, Monday through Friday, and can go up or down multiple times per day.
  2. Rates are locked for a specific time period. Most commonly, rates are locked for a 30-day period, but 45-day, 60-day, 90-day, and 180-day lock periods are also available.
  3. Rates are locked by your loan officer.
  4. Being quoted a rate does not equate to locking a rate. A quote is a quote, and a lock is a lock.
  5. Rates can be locked once a property has been purchased and you’re in escrow.
  6. The longer the lock period, the higher the rate.
  7. Your FICO score, down payment amount, property type (house vs. condo), occupancy (owner occupied or non-owner occupied), loan term (30-year fixed vs. 5, 7 & 10-Year Adjustable) ALL affect your rate.
  8. Once a rate is locked, no rate changes can be made. Think of locking a rate like buying a stock. Once you’ve bought it, it’s final. Rate changes barely affect your monthly payment. On a $500,000 loan amount, the difference between a 4% and 4.125% rate is $36 per month
  9. The truth is that no one knows whether interest rates will rise or fall in the short term, so lock your interest rate as soon as possible and feel great about the rate you locked.

In the 1980’s, first mortgage interest rates exceeded 16% and never dropped below 9%. Today, interest rates are at an all-time historic low. Why try to bet that things will get even better when you can take advantage of great current rates?!