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Hope for the best but prepare for the worst (Lock your Mortgage Rate!)

By
Industry Observer NMLS #30039

Hope for the best but plan for the worst

Recently it was pointed out to me that I'm an eternal optimist in most day to day interactions.

I always give the benefit of the doubt. I always assume that errors are "mistakes" and "accidents" and that there is no malicious intent and never any intent to deceive. I believe that human beings are good people and would do good things even when others aren't looking. There are anomalies, but I believe in innocent until proven guilty. This tendency of mine has come back to bite me from time to time, I've been mislead and taken advantage of a few times. My peers and family will sometimes assume that I'm naive or ignorant to the ways of the world, but the truth is that I just choose to see the best in people and most people rise to the occasion. Those victorious occasions far outweigh the burden I'd feel if I suddenly expected the worst from every interaction.

So why then am I such a conservative doomsayer when it comes to mortgage rates?

Why do I feel like the sky is falling and everyone should lock in their rates today and not wait until next week or even tomorrow? Why have I for everyday of the last decade recommended that my clients lock in their rate asap because rates could very likely go up in the near future?

It's because rates aren't people and I'm in the business of helping people. 

People make their payments at the end of the month. People raise their families in the homes they buy. People live their lives and make a house a home. People spend their time, their love and their life in a home and I want to ensure that I help make that reality a little easier to obtain. 

There are others that are bolder. They predict when rates will drop and advise their clients to wait it out, sometimes they are correct and their clients win. On the flip side, I've seen clients let $50,000 in interest savings slip away because they thought that surely a Fed meeting announcement would drop rates. Not knowing or believing that the market was already preparing for the worst and news that isn't quite as bad as expected will actually raise rates. I've seen it happen and it's crushing.

I believe we are in a raising rate environment so everyone should lock before it's too late and they raise more. When the market was falling I recommended that everyone lock because we would never know what the bottom was until we looked back in time. We now know that a few lucky people locked into rates at less than 3% on 30 year fixed loans. Less than .0001% of the mortgage market locked in on that day, it was like hitting the lottery. We can't all hit the lotto, but if you come away with a 10k scratch off you'd consider yourself pretty lucky right? That's the difference between locking in a 240k loan at 4.375% vs 4.625%, which was the shift over the last 10 days. A few people lost 10k in savings overnight. They lost their lotto tickets. Poof! 

I recommend to lock in a rate when I KNOW that it's a benefit.

When I can make certain that this rate at this payment will help you achieve your goals, it's time to lock in the savings. On locked and approved loans I have a 100% percent chance of saving you money, on a floating rate we have the potential to save nothing. 

Lock your Mortgage Rate!Just like when you go to Vegas... Don't get Greedy.

 Slow and steady will win the day and I advise you to do a little homework, but lock into a rate while you can. If you are debating on whether you might be able to save $41,000 instead of $39,500 and take too long you might find yourself not saving anything. I'm not pushy when I'm recommending that you lock in your rate, I'm trying to guarantee your return on investment. The risk is ultimately yours to take, but I'd lock it up if I were you. 

 

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Please note that the views/opinions expressed here on this website/blog are mine alone and do not necessarily reflect the views/opinions of any past or current employer.

Sundance Brennan
NMLS #30039