Steven Keefe, Broker/Owner Coldwell Banker Sky Ridge Realty
Arrowhead Home Loans, Inc.
www.mountainmoves.com
steve@mountainupdate.com
909.336.2131
With interest rates at record lows, all lenders in the US have recently seen a sharp increase in loan applications - right at the time that many lenders have cut headcount to save money in a challenging economy. This means that timeframes needed for underwriting, approvals and closing have become longer than normal. Some companies have chosen to actually raise rates just to slow down the volume to a manageable level.
Sound crazy? No
crazier than when you go to buy that hot new vehicle...only to find that there
is no price negotiation. In fact, you wind up lucky to just pay the sticker
price, as the demand usually allows the Dealer to add a markup to the price.
And you don't get the car right away; you have to wait on a list for your turn
to come up.
Right
now, home loans are like that hot new car - but with the timer ticking on
interest rates locks, there are a few things you can do to protect yourself.
First, longer
lock in time frames than might normally have been considered are a necessity,
to ensure that the file has time to be processed, underwritten, approved and
closed in time to protect the rate lock in this extremely volatile climate. And
that longer, safer lock-in period may be a bit more costly - but it's money
well spent. Overall, the mind set here should not be one of greed. Don't try to
squeeze every last drop out of rates. If you are within a quarter percent of
the lowest rates offered in the history of this country, you did very well. And
rates always shoot up higher at a much faster pace than when then dip lower. So
if the savings or opportunity make sense - grab it.
Next, responding
quickly to requests for information or documentation is important - the faster
the file is submitted and approved, the better off we are to keep that great
interest rate protected.
Finally, be
aware that it may be a smart idea to pay points to gain the best interest rate
- and sometimes is even necessary in today's market. Giant mortgage buyers
Fannie Mae and Freddie Mac have recently imposed more "risk-based pricing
adjustments", meaning that even credit scores and loan to values which in
the past would have been considered very low risk, may now be subject to mandated
fees by Fannie and Freddie. And based on the way lenders have changed their
rate sheets over time, there is now very little "premium pricing",
which used to allow options for fees like these, points or other closing costs
to be covered in return for a slightly higher interest rate.
Right now is
still an excellent time to act, before the great low rates of today get away
from us. But let's be smart - call us for
information on how we can get started right away.
Contact us at Arrowhead Home Loans, 909.336.1793 or send me an email at steve@cbskyridge.com
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