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Short term Rate Advice- Lock In Now!

By
Mortgage and Lending with Compass Lending Solutions, LLC NMLS #204400

This information is on Short term Rate Advice- Lock In Now!

I usually don't give short term advice on whether the public at large should lock in an interest rate. With my own clients I weigh the risk and rewards of waiting for rates to improve or go up carefully, and in most situation we are able to gauge a reasonable time in the loan application process to lock in an interest rate.

This blog post is to illustrate to the activerain community an opportune time to lock in rates for your clients or advise your buyers to have a serious discussion about locking in rates. If you are looking for a great lender and you happen to be lucky enough to live in the great State of Utah, call me and I will take excellent care of you or your client. Closing on time, everytime with a smiling borrower sitting at the table.

This chart is the price of the 4.0% 30 mortgage backed security. It works in an inverse relationship to the rate that the borrower will obtain. We have one month of improving rates followed by three days of being stuck in the same position, with today making a turn for the worse. The difference in interest savings today versus one month ago is in the thousands per year for the average sized loan.

NMLS #204405

Kim Boekholder Utah Real Estate/ PECO
Results Real Estate 801.580.5624 - Draper, UT
Broker Results Real Estate/Leasing Specialist PECO

Ryan, unbelievable rates.  I can't imagine anyone still sitting on the fence.  I wish my pockets were deeper and full of money because I would be out there buying up some homes.  Great advice! 

May 10, 2011 09:48 AM
Ryan Frost
Compass Lending Solutions, LLC - Draper, UT

I totally agree Kim. Today's Home Affordability Rating is the best it has been since the early 60s. That factors available interest rates, average sales prices, and average wages to determine a comparison of housing affordability throughout time.

Remember our parents bragging that their first home cost $16,000? Why didn't they buy 10 homes then! Well qualified parents wanting to invest in their family's futures should consider investing in real estate.

May 10, 2011 10:03 AM
John Saari
Worcester, MA
"The Mortgage Buddy"

Nice post Ryan. Thursday and Friday's data should be interesting. Hopefully inflation numbers stay muted.

May 10, 2011 11:25 AM
Ryan Frost
Compass Lending Solutions, LLC - Draper, UT

John- Never say the I word, but your right the PPI and CPI numbers are critical right now and could be the catalyst for a massive rise in rates or a breakthrough of the 200 day moving average. Wouldn't that be nice. 

If you look at the chart today. It appears that rates got way worse overnight, but it is only because of a bond coupon rollover, so pricing is only slightly worse today than yesterday. 

May 11, 2011 05:38 AM