When applying for a mortgage, it is wise to compare different mortgage products with other lenders. When reviewing these products and terms, buyers may want to pay attention to one of the most critical factors: the interest rate.
The interest rate is essential for a mortgage because it directly affects the mortgage payment. If a buyer is offered a low rate, they may want to go ahead and lock it in.
But what does this mean, exactly? And what is the best day of the week to lock a mortgage rate?
What Affects Interest Rates
Before we get into the details of how to lock in a mortgage interest rate, we must first determine what affects interest rates.
Interest rates on mortgages depend on various things, including a buyer’s credit profile, loan-to-value ratio, and loan amount. These factors are significant, and rates can fluctuate over the week and even over the hours in a day. Buyers will want to maximize their savings by timing the locking in of their rate.
Lock In An Interest Rate
To “lock in” a mortgage interest rate refers to the point at which a lender promises to offer a rate for a specific amount of time during a buyer’s close of escrow period. The lender promises to honor this rate no matter how rates fluctuate during this period.
Typically, a mortgage rate is locked for 30 days, but this varies depending on the type of transaction (purchase or refinance). If the refinance or purchase takes a bit longer than this lock period, the buyer may be subject to lock extension fees.
So when is the best time to lock?
Mortgage rates tend to open in the lower end of the spectrum on Mondays, and rate movement is more likely to occur in the middle of the week.
The market is so volatile and unpredictable that rates could improve during the middle of the week compared to how markets opened.
This decision can make a huge difference in a buyer’s financial future, and the best thing to do is research. They will have to make sure they know what can affect rates to spot when a great rate is offered.
There isn’t a specific day that anyone can pinpoint, but buyers should lock in their rate with a lender they trust and when they understand the rate, they are being offered. JVM Lending strives to be as transparent as possible with homebuyers during this process and will always provide the lowest rates possible.
If you would like to learn more about JVM Lending’s interest rates or discuss your qualification in more detail, you can reach out to one of our expert Client Advisors. Our team is available 7 days a week by email at [email protected] or by phone at (855) 855-4491.