Locking a Mortgage Rate in a Volatile Market
Your home financing is a big commitment and big investment. You need to make sure you are happy with your loan.
As an average consumer it is hard to study the mortgage market in these volatile times and accurately decide when a good time to lock into a new interest rate will be. Rates are changing multiple times a day.
The first thing you need to understand is that what is causing the rates to go up and down right now with the major banks may have nothing to do with the stock market or treasury yields or any of the other typical indicators that we can look at to try and follow the trends of mortgage rates.
More than 300 mortgage banks have gone out of business during this real estate and economic crisis in the last two years. The one common thread for the ones that are still around is that they have been forced to reduce their staff to skeleton versions of what they once were to try and weather the storm.
As mortgage rates decrease and the demand for new loans increases the banks are finding themselves in a position of overflow. They no longer have the robust back office staff that can support millions dollars of new loans every day. To control the increased volume that is slowing down their processing turn times they are pricing themselves out of the market to deter new business while they catch up.
So all the indicators that we study as consumers to determine when to lock into a new mortgage rate may not apply. The market is moving up and down because of the lack of work force of the individual banks, not the change in price on the mortgage notes.
Do not try and monitor these swings on your own. Work with a mortgage company that watches these swings in real time. If you provide them with the documentation they need to qualify you for a loan they can watch for the sudden dips in the market and secure a low mortgage for you.
As an average consumer it is hard to study the mortgage market in these volatile times and accurately decide when a good time to lock into a new interest rate will be. Rates are changing multiple times a day.
The first thing you need to understand is that what is causing the rates to go up and down right now with the major banks may have nothing to do with the stock market or treasury yields or any of the other typical indicators that we can look at to try and follow the trends of mortgage rates.
More than 300 mortgage banks have gone out of business during this real estate and economic crisis in the last two years. The one common thread for the ones that are still around is that they have been forced to reduce their staff to skeleton versions of what they once were to try and weather the storm.
As mortgage rates decrease and the demand for new loans increases the banks are finding themselves in a position of overflow. They no longer have the robust back office staff that can support millions dollars of new loans every day. To control the increased volume that is slowing down their processing turn times they are pricing themselves out of the market to deter new business while they catch up.
So all the indicators that we study as consumers to determine when to lock into a new mortgage rate may not apply. The market is moving up and down because of the lack of work force of the individual banks, not the change in price on the mortgage notes.
Do not try and monitor these swings on your own. Work with a mortgage company that watches these swings in real time. If you provide them with the documentation they need to qualify you for a loan they can watch for the sudden dips in the market and secure a low mortgage for you.
About the Author:
To learn more about locking mortgage rates in this volatile mortgage market please start by viewing some real time mortgage rates.
posted by Credit Counseling at
12:33 PM
0 Comments:
Post a Comment
Subscribe to Post Comments [Atom]
<< Home