Mortgage Blog

It's very hard to get the best rates, you will get it only when you are lucky
to lock the rate at the right time.

It's hard because:
1)WE don't know which rate is lowest rate.
2)If WE  locked a rate earlier, it's very hard to re-lock or float down.
3)And  Even when we  want to lock the better rates, and the lender's
system will be either busy or the rate goes up quickly.
4)The window for the "lowest" rate is very short, only a few lucky people
can get those rates.

Why it's so hard to get those "low" rates? One of the reason is related to the
lender's pipeline management.

The lenders could not fund unlimited amount of loans. They used the credit line to borrow a few Billion Dollars from the Fed or some other banks. When the rate is at  the lowest level, a lot of LOs(Loan Originators) or borrowers will lock the rates; So the lender's pipeline will be filled up very quickly. After the lenders have enough loans, they will increase the rates to a very higher level.

That's why we will not see the rate 5%(30 yr fixed 417k loan) pretty soon because they are some borrowers who missed the 4.875% to 5% rate will lock the loans at 5.375% to 5.5% level(they are a little bit "scared").

That's why the rate went up after reaching 5.375% level this morning. But we should have lower rate a few weeks later. We may have higher rtae this Thursday as well.