Protecting My Client is Job 1 in Rate Lock Purgatory

I have a client who was floating into December because the longest rate lock her first time buyer program had was 60 days.  The election sell off in MBS bonds sent her rate from 3.875% to 4.125%  included buying down the rate from the then available rate of 4.375% using a pre-negotiated rate protection allowance we had secured for her.  On Wednesday, however, the market opened a gap lower.  That meant that the rate was now even higher because I could not protect it overnight.  What to do I pondered.  I started playing with numbers in my head as I frequently do.  I surmised that if I switched to an FHA loan that I could get a lower interest rate, a lower pmi payment and a total monthly payment that was more that $180 less than the payment at the 4.125% rate which I could no longer get.  I woke up this morning and plugged the numbers into my software and sure enough I protected my client and made her very happy too with her locked 3.75% rate.  It pays to look at every possibility before you throw up your hands in defeat.  Here is to happy clients!!