How to Get the Lowest Mortgage Rate

How to Get the Lowest Mortgage Rate

Are you trying to time the mortgage market attempting to get the lowest rate?

I speak with Massachusetts homeowners every day and it seems that is exactly what a majority of them tell me they are doing. While I understand the thought process there are a few details that you need to know and some things you can do right now to help get yourself in the best position to get the lowest mortgage rate.

First you need to determine if refinancing makes sense right now at today’s rates. If yes, then you need to move forward and get the process started. If today’s mortgage rates are not quite there yet you can float your rate until it may or may not become available. We can determine a target mortgage rate and monitor and then lock it for you once it becomes available.

When mortgage rates dropped in December 2008 those historically low rates lasted just hours. Mortgage rates with no points stayed just below 5% for a few weeks after the 16th of December but have slowly moved higher since then. Why? Part of the reason is that the lender’s do not have enough staff to handle the volume of applications they received.

By raising the mortgage rates to higher levels it has slowed the flow of new applications so they can close what they have already received into their pipelines. What also took place was that in order to meet the rate lock period loans were being locked for 45 to 60 days.

The best way to lock in the lowest mortgage rate is to be able to lock for the shortest period available. (7-15 days). With current underwriting turn-times averaging several weeks you can’t lock for these short turn times and still close on time. The result is not getting the lowest rate.

What can and should you do? Start the process now. Once we determine that refinancing makes sense submit your mortgage application and all supporting documentation and get the mortgage loan approved. Once all conditions have been met you can lock your loan for the shortest period and obtain the lowest rate and close your new home loan on time. This allows you to be able to lock the lowest rate.

Remember, if you wait and rates do drop but you have not started the process you will not be able to lock in the lowest rate with a longer lock in period where the lender has built in rate lock insurance. Your application will be in the same pile as everyone else and you will not be able to lock with the best mortgage rates.

Waiting is not going to get you what you are looking for.

Jeff Drew is a licensed Massachusetts Mortgage Loan Originator with Star Mortgage in West Bridgewater. He can be contacted at Jeff@StarMortgage.com or visit his website at www.JeffDrew.StarMortgage.com.