Rate shopping can feel like a tough game, especially in a world where mortgage rates are as unpredictable as the weather. Just as the weather forecast can change unexpectedly, so can mortgage rates. It can be frustrating to find the lowest rate, only to discover that it’s no longer available once you are ready to get it locked in.

It’s also important to keep in mind that the lowest rate you find at the start of your quest may no longer be the lowest when it comes to sealing the deal at closing.

So, what’s the secret sauce that will allow you to score the lowest mortgage rate overall?

 

What Happens if Rates Drop After Your Mortgage is Approved?

Picture this scenario: You’ve secured what appears to be the rock-bottom mortgage rate. It’s all set, ready to go. But even though you’ve inked the deal, it doesn’t mean that rate is set in stone. If mortgage rates decide to take a dip, you can still take advantage of the lower rate. Most mortgage lenders offer something called a ‘float down’. In simple terms, if rates nosedive, your rate can follow suit.

But there’s a catch – it doesn’t happen automatically. Your trusty mortgage pro needs to keep a close eye on the rates and put in a request for the lender to proceed with the drop. While some lenders will allow unlimited rate float downs, most will cap it to a single rate reduction.

This is where strategy comes into play and why you want to ensure you’re choosing the right broker to work with.

We don’t want to pull the trigger on the lower rate too soon. Why?

Because it’s possible that we could see multiple rate drops before your closing date. If we jump the gun and snatch up the lower rate the moment it becomes available, we might miss out on an even juicier drop if rates keep falling.

Sometimes a lender will introduce a new promo that is for ‘new business only’. So, if your closing date is still a good 120 days away, it might not make sense to pounce on the low rate like a hungry cheetah. We’ll advise you on this accordingly at the time. One of the added services we offer is that we’ll watch and monitor the market for you.  We’ll ask for your application and document package in advance, so we’re locked and loaded, ready to fire it off to a lender if we sniff out a rate hike on the horizon. You can then have the confidence in knowing that we got your rate locked in at the perfect time, therefore maximizing your savings.

 

Changing Lenders for a Lower Rate

If you have received a mortgage commitment from a lender and have already signed on the dotted line, you’re not legally obligated to go with that lender. You’re still free to move to another lender should a better offer come out. But this doesn’t mean you should be jumping ship and pouncing on the new, lower rate the second you hear about it.

Why?

Sometimes lenders will leapfrog each other with lower rates. You might spot one lender offering a lower rate today, only for the lender you’re currently approved with to swoop in with the same, or an even lower rate days later.

If you happen to find a lower rate with a different lender, please bring it to our attention. It could be a fresh promo that just hit the streets, and there’s a chance that we could snag an equally, or perhaps even more enticing offer without you having to go through the whole application, credit check, and document review circus all over again.

 

The Mortgage Rate Trap

All mortgages are not cut from the same cloth, so the lowest rate does not always make it the best choice. In fact, choosing a mortgage based on rate alone can be a costly mistake as some lenders may have harsher terms and conditions that can come back to bite you down the road. I explain this in detail in my blog on The Best Rate vs. The Best Mortgage.

 

Cracking the Code Behind Mortgage Rates

Have you ever spotted an enticing mortgage rate advertisement, only to discover that it doesn’t apply to your situation?  Mortgage rates can vary for a variety of reasons. Factors such as purchase price, down payment, closing date and property usage can all influence the rate you’re offered.  

Many are surprised when they discover that a 5% down payment secures a lower mortgage rate than one with 20% down. Common sense will tell you that a larger down payment will be less risky for the lender. But this isn’t about risk. It’s about the lender’s cost of funds. When a lender incurs higher expenses in procuring funds, the rate gets adjusted accordingly. Conversely, lower costs translate into more competitive rates. 

I explain this in full detail in my blog on Why Different People are Quoted Different Rates 

 

Conclusion

We’re on a mission to save you as much money as humanly possible. We’ve got our eyes glued on the rate market, ready to pounce on the lowest mortgage rates for you like a hawk on a mouse. Remember, it’s not just about getting the lowest rate when you first apply for your mortgage. It’s about sealing the deal with the lowest rate when your new mortgage closes.

At the Paul Meredith Team, we’re serious about getting you the lowest rate possible. We’re always scouring the market for the lowest mortgage rates, committed to ensuring that you’re saving as much money as possible… while giving you a better experience than you’ll get anywhere else.

Let’s now get started on getting you a mortgage rate so low that you’ll be smiling for months!