When getting a home mortgage, at some point along the way in the loan process, you have to "lock in" your interest rate. Locking in guarantees the rate you're locked at. If the market gets worse and average rates go higher, if you're locked in, you're protected. Typically, if the market improves slightly and rates come down some, you're still locked into the locked rate. If the market moves a lot, and rates come down substantially, most lenders will offer the opportunity to reduce your rate, or at least meet you half way with what's called a "float down". … (14 comments)
When a mortgage applicant is pre-approved for their home loan and the file is officially submitted, one of the early steps is discussing the rate lock. A rate lock is exactly what it sounds like. The rate of the mortgage loan is locked in for a certain period of time, usually 30-45 days if done early in the transaction. The rate lock protects applicants from volatility in the mortgage rate market, and after locking in, an applicants rate will remain unchanged even if the market rates move higher. This is an especially useful tool in … (9 comments)
The market took a wild ride this week, brought us the lowest rates we've seen in quite a while (which inspired this blog), made the phone ring a few more times than usual, and opened the door for a few previous clients to knock PMI right off their loans (Winning!).
While this week's news on plummeting rates was exciting, I kept a few market "rules" in the back of my head as things started looking better and better. For one, Friday is traditionally a bad day for mortgage rates. Fridays following a week … (47 comments)
I know, it's not Friday. In some parts of the country, it's actually Sunday, but since our rates don't change over the weekend we're still OK. Rates had a good week, and though the markets saw some volatility, it was a relatively calm week. Rates are still sitting very close to their all time lows, so home buyers and home owners alike are in great shape to lock in a rate.
Overall, the markets are remaining stable due to uncertainty in both domestic and international economies, and the fact that a Fed rate hike is almost … (2 comments)
Following my hump day udpate a few days back, rates responded in a way that didn't surprise anyone too much - despite economic data that should/could have reduced rates further, traders pulled back and sold MBS Thursday, showing the sentiment for Wednesday, although good, was a bit too exuberant.
Today, thankfully we recovered some of what was lost yesterday, and over the past 2 weeks we recovered much of what was lost in the 2 preceding weeks.
Rates are very, very attractive right now, once again approaching the … (5 comments)
For months, volatility was the name of the game. Then November rolled around, and all went quiet. The market has been steadily treading water for the past several weeks, seeing the elections come and go, and stock market volatility remain in check as well. Many people anticipated rate increases as the Fed's MBS purchase plan ceased (I wasn't one of them), but that didn't happen, and as we head into the holiday season, we may be able to ride the current low rate environment into 2015. If things are going to … (10 comments)
The elections are over, finally. Sanity has finally been restored to Washington DC. Just kidding. But the financial markets may actually be more free from political influence in the coming weeks so that's a good thing. Last week we saw a pretty boring week in the bond markets, with the exception of Friday, when the market moved in a favorable direction and brought rates down just a bit. Then today rolled around and took out most of Friday's gains. The market had a pretty tough day, mostly … (10 comments)
It was a tough week last week to determine the real state of the market or what direction things would head in long term. It'll be tough to gauge this week too, at least until Wednesday. You know, the day after elections, when the people in charge have a little less to lose. Last week we saw rates get slightly worse thanks to (another) rally in the stock market. We've seen similar rallies over the past few months, and all of them have been brought back down to earth. Mortgage bonds … (9 comments)
And we're back. Back to at least a little bit of stability, it seems. For now, anyway. The insanity of a couple of weeks ago has calmed, the market reversed course, as expected, and we're back to a more stable place, with rates just slightly lower than we saw a few weeks ago. Don't expect this to last.
Today we saw modest gains in the bond market, which didn't shake up rates but was a nice way to start the week with some momentum that … (6 comments)
For once, I knew exactly where the market would open and close to start off a week. My crystal ball told me that the mortgage market would finish Monday in the same place it ended up on Friday. Low and behold, that is where we are. Thanks to Columbus Day, bond markets were closed today. The rest of the week promises to be a bit tougher to predict.
Mortgage bonds will step into the Octagon and go head to head with the stock market this week. Bonds took … (1 comments)
This was a good week for bonds, for the first time in a while. Bonds have seen improvements throughout 2014, and rates have come down as a result, but this is the first week in a while there were multiple sustained rallies that came about as a result of typical market moving news. In past forecasts and updates I indicated the 17,000 mark for the DOW would prove to be a tough barrier to break, and that's proven to be true. This week's stock market reversal … (6 comments)
I'm back in action after a week of not wanting to write about the market. Seriously. It's exhausting. Thankfully due to business, I didn't get to write in the rain as much as I'd like, and my weekly market reports were victims. Thankfully, the market cooperated and did the same thing it's been doing for the past few months - a whole lot of volatility without a whole lot of movement in the end.
This week, we've got plenty of economic events that will likely … (7 comments)
1,2,3,4,5,6,7,8,9,10 - STOP THE FIGHT. Mortgage backed securities (MBS) were KO'd this week. It wasn't pretty. Throughout the week, bonds fought the good fight, looking like maybe, just maybe, they had a comeback in store, but the market threw some haymakers and at the end of the week, rates are a bit higher than they were last Friday's update. Hopefully, if you read that update, you took my advice & locked in those interest rates. If not, you lost some ground, but all is not lost … (2 comments)
Football's here, only a few more days until retailers get the HalloChristGiving decorations in the stores, and as we try to hang on to what's left of summer, stores will do their best to convince us we need to start buying for winter. Ahh the smell of capitalism is in the air. Or, as I prefer, the smell of late night bonfires & marshmallows roasting. In our Friday Market Wrap we discussed the market being in a fickle state, and I expect that to continue. Investors have their eyes … (11 comments)
Take last week's Weekly Wrap, do a complete 180 and think of everything's opposite, and voila! You've got this week. Easiest. Weekly Wrap. Ever! Since I've gotten decent feedback from these market reports, I owe it to those who read them to do a little better than that, so here's what happened this week to take the market back to almost exactly where we were 2 weeks ago.
The market was closed Monday for the Labor Day holiday, so that makes my … (5 comments)
Farewell summertime! While this weekend's Labor Day holiday marks the unofficial end of summer, it seems traders in the marketplace took an early vacation, if this week's market movements have been any indication. It was a good summer for mortgage rates, as we saw the highs from earlier in the year diminish and rates settle at an annual low. If my Monday Forecast from earlier this week was any indicator, I was pretty uncertain of how potential market movers might play out. Well, this week came … (6 comments)
Hard to believe this will be my last forecast of August - does anyone know where summer went? Last week's forecast was somewhat predictable based on the previous week, and we saw the market return some of the previous week's gains to land in the same territory we've been in for the past couple of months. While we'd all like to see rates trend and continue trending downward, it's important to remember we're much better off than at the start of the year, and hovering right near the … (12 comments)
In last week's forecast, we stated that if we received any negative economic news to add pressure on risky assets to the already present risk of global instability, we could see an improvement in mortgage rates. With the retail sales report from last week missing expectations, that's exactly what we saw. Rates improved consistently from Wednesday thru Friday, with some of the largest multi-day improvements we've seen in quite some time. While this was a nice opportunity for those sitting on the fence to lock in a low rate, many likely … (5 comments)
What happens in Ukraine doesn't stay in Ukraine. That's what we learned as this crazy week came to an end for the bond markets. The week started off much like the last, but ended with a boost to mortgage bonds driven by both domestic economic news and global news.
In my Monday forecast I discussed various events pulling rates in different directions, and stated "if domestic reports come in below expectations, it should be a good week for rates.". Well, domestic reports came … (5 comments)
After last week's craziness, we got a chance to breathe this week. The market showed little total movement thanks to a lack of major economic reports, but as I discussed in my Monday Forecast, global events played a role in nearly all of the market movements this week
We've got Ebola in Africa, Hamas in Gaza & Israel trying to erase eachother from the planet, civilians being murdered in Iraq, American bombings in Iraq (I thought we were out of there … (5 comments)
Rate Lock Fees
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