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The waiting game – floating vs. locking a mortgage rate More Than Mortgage Industry News For Real Estate Professionals This Issue: • Feature Article • Trending Now • In the News • In the Know The waiting game – floating vs. locking a mortgage rate Does it seem like everything in the world affects the financial markets and, in turn, mortgage rates? If so, it's because it's true: today, it's foreign unrest; tomorrow, it's the U.S. jobs report. Home buyers keenly feel the effects of those tumbling dominoes – but to switch metaphors, waiting for the right rate is more like watching a roulette ball bounce around a wheel: where it stops, nobody knows. And this leads to a decision that buyers continue to face: whether to float or lock their mortgage rate.   How the game is played Locking in a rate means exactly that: the buyer locks in the rate and it can no longer be affected by changes, up or down. When buyers "float" the rate, they do nothing but wait for the right moment, just before closing, to lock down their final number.   Why play the game? As with any game of chance, the player's tolerance for risk dictates how long they are willing to stay in it and "let it ride."   For a risk-averse buyer, a volatile market with daily fluctuations may be as much of an inducement to lock in a rate as a relatively stable market with modest movements. By locking in a rate today, the buyer ensures that they are not impacted by any market/rate surprises when closing approaches. It's important to recognize that locking in does come with a risk: rates could drop and the buyer could miss out on a lower number – but that risk is offset by the security of knowing that they won't get a higher rate. By the same token... > Read more   Questions? Contact Me: Eric Larsen Sr. Loan Officer Coldwell Banker Home Loans (732) 539-3911 NMLS #: 271092 Email me Visit my website Trending Now What to expect from housing in the 2nd half > Read more Home prices continue to rise, but for how long? > Read more Why you shouldn't worry when the Fed raises rates > Read more In the News Current rates (Freddie Mac) > Read more 3 big ways the crisis in Greece could affect Americans personally > Read more Kiplinger's Economic Outlooks > Read more In the Know Regrets, I've had a few – the reality of buyer's remorse When did it happen? When did excitement turn to panic, laughter to tears, and satisfaction to regret? Suddenly, you're at the "buyer's crossing" – ready to step over the tracks to a completed sale – when the bars come down, the lights start flashing and you find yourself staring down buyer's remorse that threatens to break the deal.   While you may not face full-on remorse every day, you certainly spend at least a portion of your time reassuring and calming buyers. Here's a fun fact with which to impress your friends and colleagues: buyer's remorse is a real psychological phenomenon that falls under the theory of "cognitive dissonance," first studied in the late 1950s. In a nutshell, it is a state that occurs when a person holds two ideas that are inconsistent with one another – and they will do whatever they can to alter or discard one of them to regain internal harmony.1,2   So, here you have your buyer, who, on the one hand, wants "that" house, but on the other hand doesn't want it for one or a variety of reasons. That puts the buyer squarely on your couch, Dr. Real Estate Professional, to try to help them move past their conflict.   But what can you do to help avoid having them there in the first place? According to a 2014 Redfin national survey conducted by Harris Poll, 25% of homeowners suffered from buyer's remorse after signing on the dotted line – with most of the regret linked to things like neighborhood, transportation, price and other factors.3 Here are three of the most common causes for remorse – and what you can do to help prevent them before they become deal breakers.   Curb "reflective accounting" How many of your buyers have entered into a contract only to go back over their numbers and realize that they don't stack up? When you first meet with a potential buyer, discuss, in depth, their... > Read more We'd like to hear from you! Have a topic you'd like to see covered in a future issue? Email us. Coldwell Banker® and the Coldwell Banker Logo are registered trademarks licensed to Coldwell Banker Real Estate LLC and used with permission. Equal Housing Lender.   Not all programs are available in all areas. Check with your mortgage representative for availability of program in local markets.   For real estate professional use only. Not intended to be distributed to customers. We respect your privacy – Unsubscribe or update your email preferences. This email was sent by: Mortgage Service Center 1 Mortgage Way Mount Laurel, NJ, 08054, United States