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Mortgage rates are moving targets. If you've ever shopped for one, you know that.
A rate quote from yesterday has no value to home buyers today; the same way that yesterday's price for AAPL stock has no value today. You can't buy today's securities at yesterday's prices.
It's a truth that carries into mortgage markets. When you want to lock a mortgage rate, you get today's pricing, from this very minute.
In April, mortgage rates changed every 4 hours, 42 minutes on average. That's slower than March, but still really, really fast.
When you shop for mortgage rates, your lender's price is directly tied to the Wall Street-pricing of something called a "mortgage-backed bond".
Broken down, it's a bond that's backed by a group of U.S. mortgages.
On the Difficult To Understand scale, from 1-10, this concept probably rates as a 5. There's a lot of complexity in such a simple statement. The underlying concepts are much more basic, though.
Like everything else in finance, the price of these mortgage bonds is based on supply and demand. Bond sellers make supply. Bond buyers make demand.
At any given moment, the ratio of sellers-to-buyers is in flux. Sometimes, buyers outnumber sellers and bond prices go up. Other times, sellers outnumber buyers and bond prices go fall.
These shifts occur all day long and when the shifts are "big" -- a relative term if there ever was one -- mortgage rates change.
In April 2011, lenders issued 1.70 rate sheets per day. This means that mortgage rates changed every 4 hours, 42 minutes on average.
Ergo, that your rate quote from last month, last week, and, possibly, earlier this morning is irrelevant now; expired and "unlockable"; a mortgage market relic.
Believe it.
When you're taking mortgage quotes in market moving this quickly, unfortunately, "sleeping on it" is not an option and while you wait to compare lenders, rates are moving under your feet.
I am an active loan officer and I watch real-time mortgage rates all day long. I post my notes to Twitter. Follow me there and you'll get my alerts for free. This is critically important because I often post advance notice before mortgage rates change.
Being "aware", though, is just part of being ready.
To move on mortgage rates, you'll need a loan application on file with a lender, and queued to locked before rates start moving. Once they're in motion, it'll be too late.
Give your application now. It's free and fast. Call my office at 513-443-2020 or with some details. We'll get started from there.
Markets move fast. Be alert. Be ready to lock.
Dan Green is an active, multi-state loan officer with Waterstone Mortgage. Email Dan at/**/ or call 513-443-2020.
Bonus: Click to get a free, no-obligation rate quote. I love to work with my readers!
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