The New York Times
Mortgage rates continue to set new record lows, leaving many home buyers and refinancers wondering how low rates can go and how to capture the best rates now.
Making sense of the story
• Many economists are forecasting that mortgage rates will rise again later this year as the American economy gradually improves and as more global investors turn to the U.S. as a safe haven for money.
• The average rate on a 30-year fixed-rate mortgage averaged 3.71 percent the week of June 14.
The rate had averaged 3.9 percent three months earlier and 4.5 percent a year earlier.
• According to one economist, rates could possibly fall further, perhaps as much as a quarter of a percentage point, but it is more likely that they would start a “slow drift” upward.
• Those planning to refinance or buy a home in the next two or three months might want to consider locking in a mortgage rate now.
• Borrowers with rate locks, with a built-in deadline, often receive priority treatment from lenders, because the borrower is telling the lender that he or she is serious about closing soon.
• Lock-in costs and policies vary widely, and are based partly on the time frame the borrower wants covered. Most borrowers will need a 60- to 90-day lock.
• If interest rates continue to fall during the lock period, borrowers can ask the lender to rewrite the rate lock at an additional cost, or obtain a “float-down” provision in the original agreement. A lock with a float-down agreement allows the borrower to change the rate, often only once, before closing on the mortgage. This option is generally more expensive than a standard lock.
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