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To Lock or Not to Lock - Federal Announcement Wednesday.

I have been approved for a loan (30 yr fix) at rate of 4.56%. Although I have not locked my rate in, I am worried with the Federal announcement tomorrow, it could change drastically. Should I be worried or should I lock today? by housemom365_floyd... from Cordova, Alabama. Jun 12th 2018 Reply

William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,728 contributions

First, understand the the federal rate has nothing to do with mortgage interest rates.. However, indirectly, interest rates are driven by market conditions.. so if the market hears something in the announcement that they think is positive, then expect a rally in stocks which will be bad for mortgage rates.. Conversely, if the market interprets a negative, then that could help rates improve, but it would be a slight improvement.. You should lock and don't look back.. When rates improve, it moves in small increments and over a long period of time.. but when rates deteriorate, it can be in large chunks and over a very short period of time.. Personally, I wouldn't risk a possible incremental improvement with rates vs. the potential to see rates rise up a 1/4% or more... but that's just me. Go online and find a mortgage calculator.. type in your loan amount and see what a quarter point increase/decrease would do to your payment.. For your scenario, it's about $15 per month up or down for every 1/4% change in interest rate for every $100K in loan amount. So if you are financing $300K, then a rally in the market could potentially cause rates to rise 1/4 which would end up costing you $45 per month more..I'm a preferred Lender with California and Arizona being my primary markets. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 NMLS# 226347 / LendUS, NMLS 1938/ AZMB0121893

Jun 13th 2018
Ralph Richard Guertin (
#136 ranked lender in Georgia - 807 contributions

I would take it if it is still available...

Jun 13th 2018
Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 4,719 contributions

Lock, do it now, and don't look back. This has little to do with the FED announcement. The FED only controls the FED funds rate, which is what large banks would pay in interest for borrowing from the FED. It has no direct relationship to your 30-year fixed rate loan. While it is part of the calculation, it is only one part. Many other things influence fixed mortgage rates. Chasing 1/8th lower is a waste of time for most people. Rates tend to hover in a small zone, then bounce up 1/8th today, down 1/8th tomorrow. Catching the 1/8th down rate is more of just dumb luck. The bigger game is what is the overall trend of rates. As the economy improves, the trend will NOT be your friend. The odds of the market moving lower is near zero (at this time), while the odds of them climbing higher is great. Finally - 4.56%? That quote means absolutely NOTHING until locked. Probably not even available anymore.

Jun 14th 2018
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