When it comes to locking in mortgage rates, people are always confused as to what day of the week is best to keep the mortgage rates locked in. The best day of the week to lock in mortgage rate strictly depends on your risk and preference. Based on data gotten from MSBQuoteline whom are real time providers of mortgage rates and pricing, they believe the best day of the week to lock in mortgage rates are Mondays. This is because Mondays are more stable compared to every other day of the week.
Looking at other days of the week, Wednesdays are days you should avoid when it comes to locking mortgage rates because they are skittish. What this means is that Wednesdays are days where mortgage rates tends to drop while shopping or they might increase which could also cost you some of your money. The time you choose to lock in your mortgage rates is the main difference between saving up huge amount of money or paying higher costs. However, before you lock, make sure you have a perfect idea of how mortgage rates works.
Best Day Of The Week To Lock In Mortgage Rate
Another thing that you might find difficult is shopping for mortgage rates. This is because most times, it is unclear where these mortgage rates comes from or even how they are made or formed. One good thing is mortgage rates are very easy to understand as far as you can identify with some basics. These basics includes
- Mortgage backed securities are bonds and they are traded just like stocks
- The rates of mortgages are based on mortgage backed security prices
- Just like in stocks, the prices of mortgage backed security changes everyday too
From the facts above, one can easily tell that mortgage rates are driven by the market just like in stocks. Mortgage backed securities prices rises when mortgage backed securities is high and when mortgage backed securities is low then the price of mortgage backed security prices drops as well. The only thing people find confusing about mortgage rates is that they move in opposite direction of the prices of mortgage bonds. If there is a rise in price of mortgage backed security then there would be a drop in the mortgage rate.
If there is a drop in the price of mortgage backed security then the mortgage rates increases. The policies of the government halfway around the world can also influence the prices of mortgage backed securities and the policies of the government at home also plays a role as well. Mortgage rates and mortgage backed security prices are always on the move and this is why you are advised to carry out all of your mortgage rate shopping in just one day. If you delay in locking a mortgage rate then that rate you want could be lost.
Furthermore, you should be aware of the fact that mortgage rates changes everyday and on some days, they change more than others. Bearing this in mind, each day you float puts you at a high risk of losing all of your finances and this is why it is important for you to lock in your mortgage rates.
How To Determine Mortgage Rates
Before going ahead to locking in mortgage rates, you should be able to understand how mortgage rates work. It is important to have a clear understanding of how these rates work and also the mystery behind determining them. The interest rates on mortgage depends on some factors and these includes what your lender is able to offer and your credit profile. Live mortgage rates are bound to fluctuate with time and they are influenced by the following factors;
- The housing market
- Your financial health
- The economy
- Federal reserves monetary policy
Mortgage interest rates are also dependent on mortgage backed securities just like bonds. These bonds are traded just like stocks and just like in the case of stocks, the prices of these mortgage backed securities can also change at any day or time of the week. If you are still confused about what it means to lock in a mortgage rate then locking in a mortgage rates means a particular amount of time that your lender promises to offer you a specific rate.
This would warrant you and your lender to go into an agreement and your lender would also have no choice but to provide the rate he promised to offer you. At the end of the period you and the lender agreed on, the rate can change.