The short answer to this question is that nobody, including mortgage professionals like me, can predict where interest rates are going. Any lenders who tell you that they can predict this are misinforming you and should be avoided at all costs.
The fact is, in our age of instant information, consumers and mortgage professionals typically have access to the same market information.
What factors should we consider as we review this information? Interest rate fluctuations can occur due to both domestic and foreign activity. US sources of rate changes may include the revelation of some key economic statistic such as job reports, or changes made to interest rates by the Federal Reserve Board.
Foreign influences may include wartime events such as invasions, or other destabilizing events such as impacts on oil supplies.
Part of the challenge in all of this is that buyers who are in the process of purchasing a home only have a short window in which to lock in a rate. Buyers want to know, on a daily basis, what rates are doing, and they can look to their lender for direction. But at the end of the day, this is the buyer’s decision alone. Since no one can say for certain where rates are headed, if buyers have access to a good rate, it could be a good time to jump on the opportunity.
It’s also important to note that many lenders allow buyers to lock in a rate only once they are approved. Why? It’s costly for lenders to lock in a rate for buyers when there is still some question as to their ability to qualify.
To lock in a rate as soon as possible, buyers should submit any requested information and documents as quickly as they can. By working with us to keep things moving, buyers can enjoy a smoother transaction.