Borrowers often ask us if we think rates will fall further before they lock, or they want to “time to the market” and lock in their rate at the “bottom.” As a result, they are sometimes reluctant to lock or get us their paperwork. This in turn delays purchase transactions, and sometimes causes borrowers to miss refi opportunities altogether.
Risks of Aiming for “Record Low Rates
A few points in regard to this:
1. Nobody can “time the market” perfectly, and if we could, we would be billionaires doing something other than mortgages. Whether one is dealing with stocks, gold, interest rates, etc., timing the top and/or bottom of a market has always proved impossible.
2. Press reports about “record low rates” invariably lag the market. The press uses survey data from days past for their news. By the time the press reports “record lows”, rates have often already moved back up.
3. Borrowers who obsess with “timing the bottom” often get burned. Numerous borrowers have refused to lock or get us necessary paperwork, and they then ran out of luck; rates moved in the wrong direction, and lock opportunities disappeared.
Our final point: Take a good rate while the getting is good. Do not “wait for the bottom”. If rates come down again, you can always refinance again, and often at no cost.