To Lock-A-Rate or Float-A-Rate?

To understand you must first make note of this - Floating a rate in hopes that you will be able to lock in a "great or better" rate can be very dangerous in this already vulnerable market. It is true that interest rates can be amazing one day and a complete mess the next. In some cases rates can change a few times in one day. So in order to make an educated decision you will have to educate yourself first and have a knowledgeable expert to work with you.

What effects the interest rates...hmmm the wind blowing to the east and the chicken crossing the road in the morning or maybe the afternoon ....Kidding of course but here are a few things we all should be aware of (AND IN CASE YOU DIDN'T CATCH IT I SAID "A FEW" because their is always more to watch and learn from but here a few of my personal favorite topics -

Example Topics:

- ECONOMY: Because sometimes when it rains it pours. It is amazing how we normally narrow in on on thing that the media has in the number 1 spot of their hot news. Like Gas, We all know that is driving more and more of us to do things differently but what about other economic factors like unemployment?

- FEDS: The Feds have cut interests rate more during this time than many were expecting. The interest rate that the Feds cut though is the rate at which the Banks borrow money. When that happens it affects the economy. Banks borrowing money for less can sometimes mean they will lower interest rates for consumers.

-10 YR BOND: Some watch Wall Street for its highs and lows but what are they watching? A good thing to watch is the 10 yr Bond. If you do not know what a bond is than here is a quick version. Governments and Companies issue Bonds to fund the day-to-day operations or to finance certain projects. When people buy bonds they are lending money and in return bond holders get back the money loaned plus interest.

-MORTGAGE-BACKED SECURITIES: These Securities are a type of debt security that is based on pools of assets whose cash flows are backed by the principal and interest payments of a group of mortgage loans. Now in the era that we are currently in this is like walking on thin ice and can be kind of scary.

- PRICE INFLATION: Inflation is an increase in the average price of all goods and services generated in an economy. Most of the time we turn on the news and hear about inflation it is more than likely interest rates will be kicked around in the same breath.

Education is your best defense against a wicked offense. So before you play the Lock or Not Lock Game realize what you can encounter and the risks involved. With that said it can sometimes turn out to be a profitable game but in the end the decision is yours.

Good luck to all of you and I hope only the best for each of you.