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RATES CENTER
The mortgage rate is the focus of most borrowers' mortgage pursuits.
While obtaining the lowest rate is a very admirable goal, getting it can be tougher than it might seem. Rates are like stocks - they can change by the minute, influenced by the Wall Street markets and economic news.
Be certain to factor in to your rate decision your personal bigger picture goals (EG: Are there costs associated with that rate? Am I better off with the lowest rate or a slightly higher rate with lower (or no) costs?, etc...) when making the decision to lock.
Take a moment to speak with your WestStar-Ashburn mortgage advisor about your home finance goals and bigger picture goals so you can get the complete picture and make the best decision to accomplish all your finance goals.
WHERE ARE RATES RIGHT NOW?
In the not-to-distant past, when a client wanted to know what today's rates were, a loan officer would pull out a rate sheet, calculate the adjustments and tell the client "right now, the rate is....".
Those days are gone. With technology and "risk-based" pricing, each rate quote is tailored to the client's details - their credit score, the property type and debt-to-income (DTI) ratio are just three of the factors that go into determining the available rate.
Speak with your WestStar-Ashburn Mortgage Advisor to obtain an accurate, timely rate quote.
THE RATE LOCK ROLLER COASTER
(aka "Knowing When to Lock Your Rate and Terms")
While we all wish we had the magic key, none of us can tell you when the right moment comes along to lock a loan. If we did, we'd be making a lot of money offering our prognostication services on the open market.
Rates can change daily, even multiple times within in a day in an unstable market. Pinning down the "best" rate is like picking the "best" price for a stock - it's almost impossible to time the market. Figure out what you're comfortable with, what's reasonable for your situation in the current market and prepare to "strike while the iron is hot". And, once you've made your decision, forget about the market. Hindsight, second guessing and armchair quarterbacking can drive you crazy.
INFLUENCES on RATES
THE LENGTH OF THE RATE LOCK: The longer the lock, the higher the rate. Standard rate locks, unless specified otherwise, are normally 30 days. The longer rate locks tend to be a bit higher in rate. Remember, the rate lock has to cover getting you through settlement and disbursing funds (including the three - day recission period for refinances).
CREDIT SCORES: Credit scores have a major impact on rates. In the past, there was no adjustment for scores as low as 640. Today, conventional rates start adjusting for credit scores below 740 with tier adjustments for every drop of 20 points in scores.
Government loans are a bit more forgiving with normally one or two adjustments for scores below 700, down to the minimum score allowed.
Learn more about the impact of credit on your mortgage rate here.
OTHER FACTORS:
- Total loans-to-value (TLTV), meaning the combined value of all the loans secured by the subject property compared to the property's value.
- Debt-to-Income (DTI) ratios, meaning the amount of your income obligated to debt maintenance, both consumer and housing debt.
- Literal Dollar Amount of Your Loans. Some programs require an adjustment to rates for loans below a specific dollar amount (EG: $150,000, $100,000, etc...). This minimum will differ from program to program.
These are not the only influences on rates, just the primary factors.
TRACKING THE MARKET
You can always check the Freddie Mac weekly survey (click here), issued every Thursday. This report shows average mortgage rates over the last week, broken down by region. Bear in mind, this report is out-of-date from the minute it's issued because it looks at the last week's averages, not the averages for the week it comes out. It does, however, give you a reference point to start from.
 You can track current influences on mortgage rates in real time by visiting these sites:
- CNBC
Scroll down to the section entitled "US Treasuries". Drop down to the 30 YR T-Bond (normally the last US Treasury listed), then move across to the column entitled "Yield". Even tho' the 30 YR T-Bond is not directly related to Mortgage-Backed Securities (mortgage bonds), the yield tends to give you a glimpse of where current rates are. In general, if you add 1.00 to the yield, you'll get an idea of where rates are for the 30 YR Fixed Conventional Conforming mortgages. As the yield moves, typically so do mortgage rates.
- The Financials
This website gives a "real time" glimpse at the mortgage market, showing national averages for today, yesterday and the last week. Remember, red is negative (leading rates up) and green is positive (meaning rates are improving).
Bear in mind rates vary from region to region (EG: rates in the South may be different from rates in the Mid-Atlantic).
The rates on this website don't factor in the details, like less-than-perfect credit, the loan purpose (EG: cash-out refinance, etc...), the loan-to-value (LTV) or the amount of points or other fees included.
Learn more about locking rates at WestStar here: Rate Lock Policies
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