If you are on the market for a mortgage you will soon find out, if you haven’t already, that the current mortgage rate is only current for that day and sometimes even for just for that hour.
This is well worth taking into consideration when you take out your mortgage.
The current mortgage rate, as with other interest rates, is constantly changing. There are several reasons for this constant state of change.
A bank makes money when it loans money to you. The money a bank loans to you is first loan to it through the federal government.
The rate at which the bank borrows money is linked to the prime rate, which is the federal interest rate.
If you have been following the current mortgage rate, then you know it is usually higher than the prime rate.
This is because the bank wants to make money from the money loaned to you. For this to happen, the current mortgage rate must be higher than the prime rate.
Shopping for a mortgage with the current mortgage rate changing everyday can be difficult.
Of course, you want to get the best rate possible, but you never know when the rate is going to be up and when it is going to be down.
How exactly can you get the best rate in such conditions? Here are some tips to help you.
When you check the current mortgage rate make sure it is a reputable source.
There are several resources that list the current mortgage rate. When you check the rates on a given day, use sources that you can trust to provide you with the most accurate up to date information.
Anything less than that isn’t worth it. The last thing you want to do is make a decision based on inaccurate information.
Compare several sources. Never use just one source for the current mortgage rate.
By looking at several different sources for the current rates, you can get a better idea of what the market truly looks like. If for no other reason, you should use a secondary source as confirmation for the rates you view on a primary source.
Pay attention to trends. The current mortgage rate changes all time; you’ve established that.
Rather than trying to pinpoint a day when the mortgage rate is at its lowest, look at how the rates change from one day to the next. Better, look at how the current mortgage rate has changed over the past month and week.
If the rate has been steadily increasing, you should probably lock in a rate as soon as possible, because the rates will likely continue to increase. However, if rates seem to be one the decline, you could wait a few days before attempting to lock in a rate.
If you are working with a loan officer, he (or she) will be able to provide you with current mortgage rate information, or even give you a resource you can use to check it on your own periodically.
Paying attention to the current mortgage rate is a good idea if you are shopping for a mortgage.