Getting a Break When Rates Dip

Getting a great, low mortgage rate is often a combination of luck and preparation. 

Consider what happened in conforming mortgages last week:

• Monday, mortgage rates plunged to their lowest levels of the year
• Tuesday, they bounced back in full
• Wednesday, they clicked higher by a eighth-percent
• Thursday, they clicked higher by another eighth-percent

And so, here we on are Friday, four days after the best rates of the year, and the mortgage market barely resembles itself.  Despite what the papers tell you, mortgage rates are not low anymore.

That's the luck element -- you can't plan for rates moving up and down.

But, if you missed Monday's plunge, and don't want to miss the next one, all you have to do is get prepared.  Then, you're waiting for luck when it happens.

There are 4 basic steps to prepare for low rates and the key is to follow them before rates plunge, not during.  That way, you're ready to pounce on low rates at the moment they present themselves.

The first step is to contact your loan officer. 

If you don't have a loan officer, or your loan officer is no longer in the business, ask a friend for a referral.  Do not call the 800-number on your mortgage statement -- you'll almost always get a better "offer" from a live person than from a call center representative. 

Next, give your loan officer a complete mortgage application, including a "credit pull".  Be honest and accurate and don't worry about the credit check harming your score -- the bureaus protect it for a period of 30 days.

Then, ask your loan officer what supporting documentation will be required to approve your eventual home loan.  Whatever it is, gather it and send it in -- either by fax or email.

And lastly, be ready to act when your loan officer calls with the good news. If rates have dipped to lower-than-normal levels, it likely won't last long.

This preparation process is very similar to what home buyers do before making an offer on a home.  Getting ready for a refinance is like getting pre-approved, but instead of waiting to pick out a home, it's waiting to pick out a rate.  

So, to summarize:

1. Contact your loan officer
2. Give a complete application
3. Gather and submit supporting documentation
4. Be ready to act

Mortgage rates don't plunge often, but when they do, it's usually short-lived.  If you're prepared for when it happens, you can lock in the best mortgage rate available at the best possible time.

It will be your lucky day and you will have been ready for it.