Right now if your looking to buy a house or simply refinance your existing residence the million dollar question seems to be should I lock in NOW or should I wait to see what happens?  I keep hearing things like:  "I keep hearing on the news that its going to get down to _______."  "Don't you think they are going to go lower" etc etc etc.  The truth is that no one really knows where rates are going to go or be even the next business day.  I heard a great statement from Dave Ramsey this week at his town hall meeting, "economists are in business to make weather anchors look accurate." 

The facts are these, in the last 20 years in banking up until last December the best rate I had ever closed on a 30 year fixed rate was 5.375 with no points, in December rates started to fall and currently we are still below the 5.375 mark, I have locked and closed loans well below that rate often times with no points.

Making a decision to wait usually means taking a risk or a gamble this is not up to your loan officer but each individual - I personally tend not to be a gambler but that is my personality  and sometimes there are reasons not to wait.  My advice on making a decision to lock in or not is as follows:

1) develop a target - much like developing a maximum bid before an auction, how much are you wanting to save on your payment or what is a rate you can live with.

2) translate the rate to dollars, waiting for that rate to fall below a certain benchmark like from 5 to 4.875 translate that into how much dollars per month that is actually saving you, I have done this countless times and depending on dollar amount and length of the loan sometimes the actual savings in dollars is a shock maybe just a few dollars per month the rate itself can be abstract make sure you translate that to dollars.

3) look at buying the interest rate down even more, any loan officer should be able to give you a choice of an interest rate to buy down to the next rate level, will it costs hundreds or thousands to obtain a cheaper rate. 

4) calculate the buydown difference in the savings and can you make that back up in 2 to 3 years or will it take 5 years to save on the buydown. 

5) should I really take cash out ?  making the decision to take cash out of your home may cause the rate to be different than simply doing a rate and term refinance, please compare the 2 different options.

Find a loan officer that will put you on their watch list if you decide to wait, make sure this is computerized I currently have 25 people and we are shopping 13 different lenders daily watching to see if developed targets are reached.

We are living in the perfect storm of buying or refinancing - prices of homes are low - interest rates are very low, and we have first time home buyers receiving 8000 tax credits - 2009 is one of the best years ever in the real estate industry!!

Darren Stewart

OakStar Bank

417 447 7927