Mortgage interest rates change daily, hourly, sometimes by the minute! Mortgage rates are like the stock market, they are constantly changing. The pricing that is there in the morning is rarely the same pricing in the afternoon and definitely not the same as yesterday's! Just as you can't buy a stock at yesterday's price, you can't lock in a rate at yesterday's price.
When you get a rate quote, you also typically get a comment that says this rate is subject to change at any time. When you decide to lock in the rate, it is not locked until you have signed a lock commitment that verifies it is locked. When I request a lock for a customer, I complete the lock request online and until I have a confirmation from the lock desk, I do not have a locked loan. There is always a small chance that pricing may change before the lock is completed especially in a very volatile market. If we see that the market may get worse quickly, we try to make sure any locks are done immediately, but if an investor changes pricing before you are locked, you are subject to the new pricing.
Over the last few months, rates have changed on average every 4 hours. Sometimes we get 2-4 price changes in one day, other days prices will not change at all. It depends on what is happening in the market. Mortgage rates are influenced by the stock market and by different economic reports that come out daily. There are several other things that can influence rates - economic information around the world can affect our mortgage rates.
When you are looking at refinancing or purchasing a home, make sure you talk to your loan officer about when and how you can lock in your interest rate. You want to get a lock letter that says you are locked in once you make that decision to lock.
When I am talking to clients about locking in the rate, I also will let them know what the difference is in the payment if the rate goes up or down by .125% - that way they understand how much the payment might change. Some people like to gamble that rates may drop more and they understand the risk involved. Others are more conservative and if they are happy with the payment, they will lock in the interest rate so they don't have to worry about rates changing.
