Cutting through the choppy mortgage rate market

Posted by  on Jan 05, 2011

If you're like most homeowners, you're watching today's mortgage rates with a sense of awe and a silent rage.

If you just closed a deal on a home refinance loan, you may be wondering if you should have waited another week to see if rates went down again. If you're waiting for your application to clear, you are probably gritting your teeth when rates go up each week. Even sitting down to shop rates feels like an invitation to get burned.

Mortgage rate anxiety

Here's the closest feeling I can compare this to. Imagine yourself in a casino with a thousand dollars to blow on any table game you wish. You wind up shooting craps, rolling a four the hard way five times in a row. You're up a few grand, no matter what, but it feels like the pressure's closing in on you. Shoot a seven now, and you'll still feel bad about the bet you lost instead of all the bets you won.

The mortgage market's like that right now, and CNBC's Diana Olick calls this feeling "mortgage rate anxiety." Even qualifying for a home refinance deal these days comes with a certain degree of survivor's guilt, having scraped through the recession with enough home equity to score a refi in the first place. To have missed the bottom of the market can fill you with a type of buyer's remorse: you made it so far, only to miss the lowest mortgage rates of all time by a few percentage points.

Why you shouldn't sweat the small stuff

With today's mortgage rates on 30-year fixed deals still hovering in the four-or-five percent range, does it really matter so much that you locked at 4.4 percent or 4.5 percent? A decade ago, mortgage rates hovered at around 8 percent, and those seemed like pretty good deals at the time. Homeowners in the early 1980's got excited when mortgage rates fell below 10 percent for the first time in a decade. By comparison, we've got it pretty good.

If you're capable of locking down a refinance rate under today's conditions, and you're confident that you want to stay in your current home for the next ten to fifteen years, the market's ready for you.

Every time rates go up just slightly, brokers and underwriters get less busy, so you're going to get top notch service. So don't sweat the small stuff; just remember to check out today's mortgage rates online and to request quotes from as many providers as possible.


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