Being Ready to Lock that Low Rate in with a Target Rate

Being Ready to Lock that Low Rate in with a Target Rate


As you have seen over the last year, the mortgage rates have been all over the place. I had a customer call me last week to get him locked into a rate that he saw on TV. I told him that the rate he wanted was not available right then, but I would take his application and make sure he qualified for the refinance he wanted. He told me to just call him when rates dropped again and he would do it then. I explained to him that earlier that morning the mortgage rates opened low and went down quickly. By 10:30 AM, the market had changed directions and rates went up. I told my customer that I track the rates and I know what the market is doing and when it changes, I am on top of it. I also told him that I don't lock clients without knowing that they are qualified borrowers. I told him I would get him pre-approved and we would set a "Target Rate." The Target Rate is a rate that the borrower is expecting and is committed to. Once that target rate is available and he was pre-approved, I would lock in his rate and we could move forward. The customer understood that there may only be a short window where that rate is available and it is impossible to reach all my clients to get them pre-approved for that low rate.


That client and I set a target rate and he worked with me to get pre-approved. The Target Rate we set was a rate that we could expect to see soon. Two days later, I called the borrower to inform him that we hit his Target Rate. I let him know that we locked his rate and that we would close his loan in 30 days or less. The customer was very happy that I secured him a great low rate.


I strongly recommend setting a "Target Rate" with your lender when refinancing. With all the volatility in the market right now, it is has never been more important to be able to react at a moments notice to secure the low rate you want.