Timing the 10 year for mortgage lock

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l2yangop
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Joined: Thu Jul 22, 2010 7:37 am

Timing the 10 year for mortgage lock

Postby l2yangop » Tue Jul 16, 2013 3:43 pm

Bernake speaks tomorrow. Rates are at a 2 year high. Could he possibly say anything that might send the 10 year higher? It seems to me he'd like to be more of a dove. I ask because I need to lock in a mortgage rate within 30 days :)

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ogd
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Re: Timing the 10 year for mortgage lock

Postby ogd » Tue Jul 16, 2013 3:53 pm

Your lender is eagerly anticipating this speech too. In fact, they're probably paying Thomson-Reuters for a 2 second head start :) (Google it)

I'd say the chances of you outmaneuvering the professional MBS investors are probably nil. And I say this having done just that, by pure luck...

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TomatoTomahto
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Re: Timing the 10 year for mortgage lock

Postby TomatoTomahto » Tue Jul 16, 2013 3:56 pm

IF you could time this, it would be sad to waste it on a mortgage lockin.

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G-Money
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Re: Timing the 10 year for mortgage lock

Postby G-Money » Tue Jul 16, 2013 4:22 pm

I'd look at this behaviorally. How would you feel about each of the following:

1. You lock the rate now, only to see rates drop 50 bp tomorrow.
2. You wait to lock, rates rise 50 bp and don't come back down within 30 days.

Therein lies your answer. (If you'd feel equal amounts of regret in either scenario, then I recommend you flip a coin).
Don't assume I know what I'm talking about.

l2yangop
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Joined: Thu Jul 22, 2010 7:37 am

Re: Timing the 10 year for mortgage lock

Postby l2yangop » Tue Jul 16, 2013 4:39 pm

Well said G-Money. I'm willing to gamble I think :)

Im expecting the Bernake we got a couple weeks ago when he had to make unscheduled commentary to calm the bond selloff.

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Rainier
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Re: Timing the 10 year for mortgage lock

Postby Rainier » Tue Jul 16, 2013 8:37 pm

Why wouldn't you lock with a float down option?
- Bill

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kenyan
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Re: Timing the 10 year for mortgage lock

Postby kenyan » Tue Jul 16, 2013 10:05 pm

Don't know about the OP, but those options don't always exist (for a particular lender). It didn't exist for us.
Retirement investing is a marathon.

l2yangop
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Joined: Thu Jul 22, 2010 7:37 am

Re: Timing the 10 year for mortgage lock

Postby l2yangop » Tue Jul 16, 2013 10:07 pm

I've asked that of the 4 lenders i've inquired with. None of them offer float down. Just float. I didn't lock in today, so I will probably just let it float for as long as I can.

inbox788
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Joined: Thu Mar 15, 2012 5:24 pm

Re: Timing the 10 year for mortgage lock

Postby inbox788 » Tue Jul 16, 2013 10:28 pm

l2yangop wrote:I've asked that of the 4 lenders i've inquired with. None of them offer float down. Just float. I didn't lock in today, so I will probably just let it float for as long as I can.

Lock one in ASAP! If rates go up, at least you have something. If rates go down, reapply, at another lender if necessary, and cancel the first loan if cancellation fees are not too steep.


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