How to handle this mortgage rate environment

With the new administration we have, the extra stimulus the federal government is working its way through the markets, inflation, or fears of inflation is definitely upon us and as result, an unstable mortgage rate environment is upon us…

The reality of it is no mortgage loan officer no matter how good they are has a crystal ball about what’s going to happen with rates all we can do is speculate about the future of interest rates and make pragmatic decisions with the tools and resources we have available on any given day.

Generally speaking, when there is bad economic information mortgage rates tend to get better because people want to put their money somewhere safe which is the bond market that generates a fixed income. As a result, yields rise and the rates to consumer improve conversely when the economy is doing well or when there are positive economic information people will move their money into the stock market yields on bonds will drop rates will rise and the stock market will become exuberant as people feel optimistic about the economy. That’s just mortgage rate 101 this relationship does not always hold true, but 80% of the time it does.

What you can do..

 

Watch the following:

  • 10-year Treasury- is a great indicator of mortgage rates.
  • Visit Freddiemac.com has the average 15 years fixed and the average 30-year fixed-rate mortgage with the average fees on a weekly basis.
  • Make sure the loan officer you have hired uses a mortgage-backed security service and actually watches the market.

Quit chasing the interest rate. Here’s why-interest rate trend right now is up. This means if you get a rate “at 9 o’clock in the morning from a lender that the same rate could change again by 10 o’clock that same morning one or even 2 more times and multiple times throughout the course of that day.

Most mortgage companies in fact 90% of them in America that are selling loans to Fannie Mae and Freddie Mac all get their money from the same place so it’s highly unlikely that you’re going to get a radically different offer from one lender to another lender all things being equal.

Most mortgage companies obviously don’t make money for the origination of loans unless they have competitive rates and fees they just have to be in order to conduct business on a daily basis. The bottom line is if you get a good rate and a good price for your home purchase and you have a contract don’t screw around and jeopardize your contract.  The same thing goes on a refinance.  You don’t have time the sleep on it talk to the spouse and get back to that lender the next day the rate in the pricing and terms change again.

It would be highly advantageous to work with a lender who primarily will service the loan the reason why is because they have choice power and control over their rate and their pricing because there actually lending you the money. The value of that to you is that many times these lenders can offer you a free float down in the process if rates drop, and the discount subsequently refinances in the future because you become part of servicing portfolio.

All of this is particularly important because you want to make sure that you’re setting yourself up for success at the end of the day. That’s just the reality of it the other reality is you will always find lower you will. If you find XYZ mortgage company and you get a rate in a price” you will find lower and you’ll find lower than the next guy down the street and the next one after that and so on. At some point, you have to decide and hope at the time of application you’re making a good decision. Making that decision with good advice from a lender that thinks big picture and truly cares about your financial picture vs giving you a .125  in rate can make a huge difference in your financial success.

Looking to get a mortgage to buy a home?

 

 

 

 

RELATED MORTGAGE ADVICE FROM SCOTT SHELDON

When buying a home, it’s natural to want the lowest mortgage rate possible. But sometimes, chasing a slightly better rate from another lender—especially after your offer has already been accepted—can backfire in a big way. Let’s walk through a real-world scenario. You’ve got an offer accepted on a house. You’re working with a lender who has you approved, documents in underwriting, and a 21-day close of escrow in place. Everything is moving forward. Then you hear from another lender offering a rate that’s 0.25% lower, with slightly better closing costs. It’s tempting. But before you make a jump, here’s what you need to consider. Switching Lenders Comes with Time Costs When you pivot to a new lender mid-contract, they’ll need to: Re-underwrite your entire loan, Order a new appraisal, Disclose and sign new loan documents, Submit the file for final loan approval, Schedule and fund closing—all over again. This doesn’t happen overnight. Even in ideal circumstances, the new lender is likely going to need at least 25–30 days to close. If you’re in a fast-moving or competitive market, this is a real problem. Most sellers won’t grant a contract extension just because you’re switching lenders. So, what happens next? A Contract Extension Can Jeopardize Your Deal Asking for a contract extension means the seller must agree to delay closing. But that delay introduces risk—especially if the seller has backup offers or simply wants certainty. They may not grant the extension. Or worse, they could cancel the deal outright and take another buyer’s offer. Even if the seller agrees to extend, your earnest money and negotiation power could take a hit. And for what? A slightly lower rate that might save you $50 to $75 a month? Mortgage Rates Aren’t as Far Apart as You Think Here’s the truth: all mortgage lenders get their money from the same place—the bond market. The pricing differences between lenders usually range from 0.125% to 0.25% in rate on any given day. If one lender seems to be offering dramatically better pricing, the first thing you should ask is: How? Head over to FreddieMac.com and check the average 30-year fixed rate posted weekly. This is one of the most reliable benchmarks for where rates truly stand in the market. If a lender is quoting you a rate that’s well below that average, ask for the details: Are they charging extra points? Is this a teaser rate with a prepayment penalty? Is it based on a different loan product or risky structure? Often, what sounds “too good to be true”… is. Consider the Bigger Picture Think long-term. If you’re financing $600,000, a 0.25% lower rate may reduce your payment by roughly $75/month. But what if you lose the house and have to start over? That monthly savings doesn’t mean much if you’re outbid on your dream home or lose your deposit. Also, remember: you’re not going to keep this rate forever. Today’s homebuyers typically refinance when rates drop by about 0.75% or more. So if rates fall within the next year or two, you’ll likely be refinancing anyway. Instead of paying extra points now or risking the entire deal for a minor monthly savings, it may be better to accept a slightly higher rate—knowing you’ll refinance when the time is right. The Real Risk Isn’t the Rate—It’s the Delay When shopping for a home loan, don’t just ask, “What’s your rate?” Ask: Can you close on time? Is this rate sustainable or based on hidden costs? Will switching lenders delay or jeopardize my contract? A home purchase contract is a binding agreement between you and the seller to perform within a set timeframe. If you can’t meet those dates because you're chasing a slightly better rate elsewhere, you may want to reconsider if now is the right time to buy. Final Thoughts Yes, interest rates matter. But execution matters more. Before making a switch mid-transaction, talk to your lender. Have an honest conversation about pricing, timelines, and strategy. You might find that staying the course, securing the house, and planning to refinance later offers a better path to financial security. Want to Know Your Options? Let’s compare rates and strategies the smart way—without risking your dream home. 👉 Click here to get a custom rate quote today.

The Risks of Chasing a Lower Mortgage Rate

Why Chasing a Lower Mortgage Rate Can Backfire When buying a home, it’s natural to…

A woman sitting at a kitchen table looking through documents with an American flag and framed military photo beside her, symbolizing a surviving spouse exploring VA loan options.

VA Loan Options for Surviving Spouses

Understanding VA Loan Refinance Options for Surviving Spouses Losing a spouse is one of life’s…

California homes near wildfire zones highlighting insurance challenges due to climate change.

Why Home Insurance Is Skyrocketing in California—and What Buyers Should Know

​Climate Change and Mortgage Challenges: Navigating Homeownership in California In recent years, climate change has…

View More from The Mortgage Files:

begin your mortgage journey with sonoma county mortgages

Let us make your mortgage experience easy. Trust our expertise to get you your best mortgage rate. Click below to start turning your home dreams into reality today!