How can a daily mortgage rates chart be useful to me?
Buying a house is one of, if not the, largest financial commitments that you will make in your life. Most home buyers use a mortgage loan to assist them in the financing of their home and mortgage rates fluctuate on a daily basis. This article will provide some insight into entering into a mortgage and using daily mortgage charts to track the mortgage rates so that you can obtain a lower mortgage rate on your loan.
Once you find a home you are interested in buying you will have to consider entering into a mortgage. There are numerous different mortgages that you can enter into and each has their own mortgage rate associated with them. Generally speaking, adjustable rate mortgages have lower interest rates but there is the risk that the mortgage rate will increase over the life of your mortgage. Shorter duration mortgages have lower interest rates than longer term mortgage loans.
Once you find a mortgage lender and get approved for a loan you will likely have the option of locking into a mortgage rate if you are entering into a fixed rate mortgage. With a fixed rate mortgage you will have this interest rate over the entire life of the mortgage and a small fluctuation in the rate can have a significant impact on what you pay over the life of your mortgage. The length of time before your loan that you can lock in a mortgage rate will vary by lender but standard lock in terms range from 60 to 90 days. Generally speaking, you can lock in your mortgage loan at any point during this period but it pays to lock it in when the mortgage rates are at their lowest.
This is where daily mortgage rate charts can be helpful. Since the mortgage rate can fluctuate on a daily basis a daily mortgage chart can provide some insight into how the mortgage rates fluctuate on a daily basis. A daily mortgage chart can also be used to develop a regression line. If the current mortgage rate has deviated significantly from the regression line then it is likely that there will be a return to the mean. As such, if the current mortgage rate is below the regression line it may be a good time to lock in a mortgage rate and if it above the regression line it may make sense to wait before locking in a mortgage rate.
Daily mortgage rates can also be compared to other debt investments such as bonds in order to identify if there are pricing inaccuracies associated with the valuation of bonds and to determine if it is a good time to purchase or sell a bond as a result. Prepare a historical comparison of bond yields and mortgage rates and develop an average ratio of these two rates over time. Then compare the recent daily mortgage rate chart to the bond yields and see if there seems to be an opportunity in investing in bonds at the current valuation of these investments.