Interest Rates, bait and switch?

[Michael King]

It seems every time I get a loan to buy an investment property, I get quoted a particular interest rate, for example 4.875% on my latest deal. As we march closer to closing, the rates always seem to go up. In this example, as of today the day after thanksgiving, the rates have miraculously (miraculous that it seems to happen every single time) gone up to 5.125-5.25%. This represents around $450-$600 a year extra interest, or up to 5% of my cash flow.

I don't understand interest rates going up on all my properties when I'm under contract. I do understand they fluctuate, I do understand you can lock the rate. What I don't understand is why they never go down while I'm under contract. Pure coincidence? I thought their hands were tied by the fed.

[Russell Brazil]

You have to lock the rate. If you dont lock it, then it floats.

Interest rates move down slowly but up quickly.