Today's Mortgage Rate Quote Might Not Be Good Tomorrow

A Home Buying Article Contributed by Elizabeth Fox-Wise

Be Sure to Get Mortgage Rate Quotes from Several Lenders

In order to ensure that you are getting the lowest mortgage interest rate available to you, it is best to get mortgage quotes from several lenders.

Mortgage lenders complete with their competition in much the same way that all businesses do. To get customers, they will try to provide better mortgage rates and terms than the competition. This information is provided for the prospective mortgage holder though what is commonly called mortgage quotes.

When You Find the Rate You Want in a Mortgage Quote, Don't Hesitate Too Long

After gathering your mortgage quotes, you should not wait too long to choose one and get a rate lock guarantee from the lender making the mortgage quote. Mortgage rates change daily, and most lenders will only honor their quotes for a short period without a rate lock. When you request the mortgage quotes you should inquire of the lender as to how long the quote is good for.

After deciding on the mortgage that you want to go with, you need to get he lender to provide you with a rate lock. This means that he will honor the agreed upon mortgage rate for a certain amount of time, usually up to sixty days, to ensure that the rate you were quoted is still available by the time the mortgage application process is completed. Try to get the longest rate lock that the lender will give, because sometimes there are complications and delays when buying a house that could push you out of the rate lock period.

Why Do Mortgage Rates Change As Quick As They Quote Them?

Mortgage lenders will typically set their mortgage rates early in the morning for that day's mortgage lending. They are always watching mortgage bond rates. Mortgage rates are effected by the price of these mortgage bonds. The effect is an opposite one. As bonds are bought and sold, the price will rise and fall. If mortgage bond prices rise, mortgage rates fall. If mortgage bond prices fall, then mortgage rates rise.

Right now the US economy is very volatile. When the economy is uncertain, investors are uncertain. It is not uncommon to see sharp rises and falls in the stock market as nervous investors buy and sell based on predictions of what could happen before close of day. The mortgage bond price will fluctuate just as wildly right along with the stock market.

Although mortgage rates are usually adjusted once a day, there are times when it might change more than once within the same business day. If the mortgage bond prices changes significantly (typically, 25 basis points or more) within a business day, the mortgage rate will change right along with it.

Therefore, when you are gathering mortgage rate quotes for comparison you not only want to get them on the same day, but you might even want to get them as close to the same time of day as possible. If you receive a mortgage quote that you decide you want to take advantage of, contact the lender right away and ask for a rate lock at time of application and then apply immediately. If you wait until later in the day, the rate could have already changed.