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Everyone always wants to try to get the best interest rate possible when getting a mortgage, renewing a mortgage, or refinancing a mortgage; however, there are many reasons why you should not wait to complete these activities and proceed with the current rate. Recently, a lot of people began to refinance there mortgages while rates had reached lower and lower. This started off a small boom in the refinance department of lenders; however, many people are considering that they may not of got the lowest rate since rates have gone down since then.

Do not worry about losing 0.25% or 0.5%. The following details why this is not important.

When people think that rates will be going down in the near future, then they will put off purchasing, refinancing, or renewing mortgages to try and get the rock bottom rate. This is actually a horrible idea,  because doing this may leave you left out in the cold.

The Negatives of Waiting to Lock In

• Employment – In this economy, many people are losing there jobs. One day you could be confident about your employment, and on the next day, you could be looking for a new job. Your lender may not be able to approve your mortgage if you do not have a job, so by taking the risk of waiting, then you may not be able to keep your current mortgage.
• Your Home Value – If you are planning on a refinance, then your property may depreciate in value over the couple of months till you are looking to complete your refinance. If you property depreciates, then it may not even be possible for you to complete the refinance, or you may not get the amount of money you were expecting to receive.
• Banks change Approval Conditions – One week you could be approved for a mortgage, and even a few days later you would not be able to get approved. During these hard economic time lines, nothing is for certain, and at any time, the bank could decide to change there lending requirements and deny you approval, even if you have a pre-approval.
• Mortgage Rates could Increase – It is easy to believe the media and expect that with the overnight lending rate decreasing, that the banks will have an easier time lending, and they will have to reduce rates as well; however, that is not the full truth. Even if the overnight rate goes down, the banks are not required to lower your rates. The banks are the ones taking the risk if you default, not the federal lending institution or the government.
• Home Foreclosures – With the increase of the amount of houses going into foreclosure, it is not unlikely that a neighbors house will go into foreclosure causing your property’s value to decrease. This could occur at any time and lower your property’s value.
• Mortgage Insurance Rates Could Rise – When most people buy or refinance a property they have to pay Mortgage Insurance. This insurance rate is not dependent on lending interest rates or what the bond rates are. Instead they are based on the rate of default, and with default rates rising, then you could end up paying more upfront for mortgage insurance then you originally had thought.
• Your Credit Score Could Fall - Right now your credit score could be spotless; however, it is is not impossible for something that you are unaware of that comes up that would reduce your credit score. It could be an old unpaid bill going into collections, or an error on the credit bureau. Any of these could cause your mortgage not to get approved or allow you to get approved at a much higher interest rate then originally suspected.
• You could get Injured – It is a fact, at any time, anyone could get seriously injured or disabled not allowing them to work. If this happens to you, then it will make it extremely difficult for the lender to approve your mortgage if you will not be returning to work for a long duration of time. This is a big threat to the well being of your mortgage.

All these reasons are good reasons to complete your mortgage application today. It is also good to complete your application sooner because your broker gets paid when the mortgage funds. Between the time when you first speak to your mortgage broker and until your mortgage actually funds, the broker is not making any money at all. The longer the broker has to wait, the less interest they will show in assisting you. Please be aware of the people trying to help you as well.

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