Interest Rate Jump

[Jacob P.]

Hi guys,

Relative newbie here. I'm in the middle of purchasing a multi-family home. We're getting close to setting a closing date. I was on the phone with our mortgage originator, and we discussed the recent interest rates jump.

I had assumed that we had some sort of a lock on the rate that was quoted in our GFE, (4.125). But I learned this is not the case. The originator told me that if we were to lock it today, we would be looking at 4.375 to 4.5. However, he suggested that we wait, and seemed to be pretty confident that we would be able to lock it at a lower rate over the next few weeks. This jump would add over $100/month on our loan.

Part of me is worried that rates will just continue to rise. Just wanted to see if any BP members had any input on his strategy or there's anything else I should be thinking of at this time. 

Thanks for any input!

[Robert Sepulveda]

Good idea. The last couple of days have been opening with the rates down, but by mid morning, they start going up again. I locked today cheaper than the rates where yesterday, even though they closed higher overall today. You can pass that on to your originator. 

With that in mind, you can track rates at a more real time basis here:

http://www.mortgagenewsdaily.com/mortgage_rates/

Ask your guy when his rates open up in the morning (chicago or ny time) and compare first thing. If it's cheaper than today and you can live with the rate, lock it. If you're more than 1/2% of cost away from the lower rate, I would expect to get that back unless a big event happens in the market.