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Help Please - Should I lock in my mortgage rate?!

Ausfarm
Regular Contributor

Help Please - Should I lock in my mortgage rate?!

My mortgage broker is suggesting that I lock in today's mortgage rates.  I anticipate closing on new construction in 60-75 days.  I've been presented 3 options (3.75% for $6kish, 3.875% for 4kish, and 4% for 3kish).  Is this a good idea?  I"ve heard rates have gone up a little since the beginning of the year, but do we anticipate a drastic increase such that it makes sense to lock in right now?

 

Any help is appreciated.

Message 1 of 5
4 REPLIES 4
ShanetheMortgageMan
Super Contributor

Re: Help Please - Should I lock in my mortgage rate?!

Rates have been extremely volatile lately, no one has a crystal ball.  They got pretty bad earlier this week and the last couple days have seen improvements, but that doesn't mean they'll continue to improve... they could get considerably worse on a dime.  I subscribe to the theory that if you like the rates that are available now, and if they got worse then it'd be devastating, then it's probably a good idea to lock it in.  If you don't love the rates that are available now and like to gamble (meaning you don't think you'll wake up in the middle of the night wishing you locked in the rates yesterday) then it may pay off to float for awhile longer.  

 

We in the industry subscribe to different tools and technical charts that try to foreshawow on what rates will do in the future, but it's not right all of the time, so even with the best possible data you can still guess wrong.  https://mbshighway.com is a popular one with a 14-day trial.

 

Below is a chart of MBS (mortgage backed security) prices over the past 3 months, when MBS prices decrease that results in mortgage rates becoming more expensive.

 

Screenshot 2022-01-21 091932.png

 

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Located in Southern California and lending in all 50 states
Message 2 of 5
Ausfarm
Regular Contributor

Re: Help Please - Should I lock in my mortgage rate?!

Wow.  Thank you so much.  Such good information.  I think I'll probably lock in.  I'm not the gambling type.  

Message 3 of 5
dfdny444
New Visitor

Re: Help Please - Should I lock in my mortgage rate?!

Those rates seem high if your score is 740+.  Check out Costco mortgage services even if its just to take to your current lender to match their rate.

Message 4 of 5
Ausfarm
Regular Contributor

Re: Help Please - Should I lock in my mortgage rate?!

Did this today and you're totally right.  Their offer was so much better than what I had been quoted.  Thank you!

Message 5 of 5
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