Relaxation in your interest rate is one way for borrowers and lenders to commit a percentage for a home loan. Timing is important to do this right. In a sense, it is a bet on both sides – the borrower bets that interest rates will rise after a certain point, and the lender bets that they will drop at some point. Both will refresh their opinions and try to get the most out of market conditions and manipulate lock-in periods.
For the borrower, it is best to lock a rate if it looks as if interest rates will rise. This can be difficult, especially as buyers often have different responsibilities than watching daily fluctuations in “current” interest rates or hearing news streams that can influence them.
For the lender, it would be best to lock interest rates at risk of falling. In most cases, lenders have an advantage over the buyers because they work in the field, so part of their job tracks news that can affect the prices they can charge. While you are in a production meeting, assembling a car, or caring for a patient, you will be alerted to the messages that affect your income and payments.
After all, you have to lock your rate anyway – logically, loan agreements cannot be completed without a known interest rate and payments charged. The day after you log in, you may find that interest rates have fallen. That is not so bad – remember, there’s probably a poor guy out there who have resisted to the last minute and realized that he has to pay more for his wait.
It makes sense to lock your rate if you think that time is best, but it is worth it to see the news on this topic. Economic and political news and disasters can affect interest rates. Business news can indicate the progress or decline of conditions such as inflation and recessions; Political trends could provide clues to policy decisions that could affect industry; Disasters like 911 and Hurricane Katrina can also affect the way people see money and can create fears and change the behavior of shoppers in general.
These factors never remain stable, and interest rates fluctuate. Keep your fingers on the pulse of your nation and the world, and you will be better able to predict when to rate your interest.