Mortgage interest rates will vary from lender to lender. They also will vary depending on the borrower's credit history and the collateral being used to secure the loan.

Mortgage rates can vary depending on the percentage of the home's value that you wish to borrow. For example, if you put 20% down on a purchase, your rate will be better than if you put 5% down.

Despite common perseption, mortgage rates are not directly tied to the prime interest rate, which is the rate you see commonly being affected by the FED. (Alan Greenspan).

Mortgage rates vary depending on your credit score. If your credit score is less than average, you will not be able to get the lowest rate available to people with excellent credit scores.

Mortgage brokers generally get the same mortgage rates since they all have access to the same lenders. However, if you go to one mortgage broker on one day and another mortgage broker on the next day, you may be quoted different rates because mortgage rates can change daily.

In most cases, the interest rates of a Hybrid mortgage or an Adjustable Rate Mortgage (ARM) are lower than that of a Fixed Rate Mortgage (FRM). This is the banks' way of rewarding borrowers who are willing to take on some of the risks of an ever moving interest environment.

Most lenders update their rates every day. A broker is not limited to the small number of programs normally available from a specific lender. A broker will usually offer you more competitive rates.

The Feds Rate is one of the primary ones that the FOMC uses to influence interest rates and the economy. Flucuations in the Feds rate have a broad effect by influencing the borrowing cost of banks in the lending market, and the returns offered on bank products like COD's, savings accounts, and money market accounts. Changes in the Feds rate and the Discount Rate also effect changes in the Prime Rate. The prime rate is the index used for many credit cards, HELOCS, and personal loans. Many small business loans are also tied to the Prime rate. The 11th District Cost of Funds is often used as an index for adjustable rate mortgages. There are many other indexes to take into consideration as well, and each of them can have an effect on your mortgage rate, if your rate happens to be tied to that index.

What is a RATE LOCK and why do I want to do it? - A rate lock is a promise by the lender to honor a particular interest rate for a specific period of time.

You want to lock your rate in because this is what guarantees that you will have the locked in rate for the amount of years that your home loan program allows. Different lenders have different rate lock guidelines and different rate lock periods. One lender may allow you to lock a rate for up to 180 days (6 months) and another may allow you to go up to 360 days, or 1 full year on the rate lock. The longer time period you lock you rate in for the higher the rate will be usually. A 15 day, or less, rate lock will generally provide you with the best rate and pricing and a 90 day ratel lock will probably be at least .25%-.5% higher. Some leneders will even charge money upfront for a long rate lock, such as 6 or 12 months.

Always be sure your mortgage lender gives you a rate lock letter when they lock the rate. This letter will display the mortgage terms and how long the rate is good locked for and what the interest rate is.

No one can tell you exactly what interest rates are going to do from day to day and hour to hour so that is when rate locks come in handy. They protect you in a rising interest rate market however you are still locked even if rates decline once you have decided to do so. Being comfortable with the payment is a good time to lock in the rate.

Some banks offer a one time float down if interest rates decrease after an interest rate has been locked. In some cases, the borrower may have to pay for a float down.

Make sure you review your rate lock with your mortgage broker and/or real estate agent. In the case of a refinance your rate lock should extend a couple days past the end of your rescission period, which will be a full three business days after your closing day. In the case of a home purchase you should make sure the rate lock lasts a couple days past your closing day.