We are 35 days from closing. Our lender has us at 6.1% apr today on a 30 year fixed. With the federal review Wednesday, should we lock our rate now in case things get crazy? Our lender suggests floating until at least mid week, and seeing if we can make it to the 30 day until closing lock window which is early next week. I’ve been hearing that current rates are already baked in with the expected federal review, but who knows what the future holds. I don’t know if it’s riskier to wait and potentially have things go up a few tenths of a % or lock now and maybe miss a minuscule drop in rates that won’t make a big difference short term (we plan to refi down the road if rates every drop below 4.5%).
What would you do?
7 Likes
It’s not going to make a huge difference either way, but the market is pricing in a certain likelihood of a 50 bps drop. If the fed drops rates 25 bps, rates may actually go up after the announcement.
6 Likes
Good info thanks. So hypothetically if they announce a 25 instead of 50 and the rates go up are we talking like 0.1%? I could see letting it ride and locking the very next day if news isn’t 50 bps but I don’t want to risk that if the likelihood is a big jump up like 0.3% or more overnight.
6 Likes
I don’t have a crystal ball, but all else being equal, I think 0.125% is the only swing you’re are looking at. Check with your lender what other issues could come up with loan approval and underwriting. If there is a reason to get the file in underwriting ASAP, go for it. If everything looks good, maybe you wait and get 5.825%
2 Likes
I just locked at 5.75% … felt like the smart thing to do… sure, I risk it potentially being slightly lower soon … but what if it goes higher? To me, it felt like a good amount to lock in at based on the rates over the past year and what knowledgeable people advised me.
3 Likes
Which bank ? Is it a ARM or fixed loan ?
2 Likes
I’m in the same boat. Ally is at 6% today. Was between 6 and 6.125 the last week. I think I’m going to let it ride and lock tomorrow after the decision. Looking at the futures market I think refi in the next 1 to 2 year seems very doable anyway.
1 Like
Lock now! The likelihood of the feds cutting more than 25 bps is 49% vs 51% for 25 bps or less which will cause rates to increase.
1 Like