Believe Me, Your Rate Lock Expires Sooner than You Think!

Your 30-day rate lock is really a 12-day rate lockOn Wednesdays, the Mortgage Bankers Association (MBA) releases a Weekly Applications Survey, which is a detailed analysis of new mortgage applications submitted over the past week.

More than likely, this week’s MBA report will tell us precisely what most of us already know – a whole lot of mortgage activity has roared to the forefront due to plunging mortgage rates – and a lot of it is taking place right here in Lakeland, Florida.

Hopefully, you’re one of many who are taking advantage of today’s low mortgage rates.  If so, I please read and understand this statement:

When your rate was “locked,” it was done so with an expiration date!

More than likely, that rate lock was set for thirty (30) days.

Some of you may be thinking… “Wow, 30 days is a long time! That’s a whole month of secured-rateness!” (Not really a word, of course.) While you may feel that 30 days is a lot of time, I offer you these words from our good friend Mr. Lee Corso of the ESPN College Football Game Day program:  Not So Fast My Friends! Especially if your rate locked before Thanksgiving, as these lock periods will lose a total of 14 days due to weekends and holidays – not to mention the 4 days you lose because of the Right To Cancel clause.

In truth, your 30 day lock really nets about 12 “working” days to underwrite and approve your mortgage – which is not much time at all.  What’s worse is that underwriting departments at even the largest lender companies have been so severely downsized of late that they are woefully understaffed to where they struggle managing a moderate work flow in a timely manner.  The fact that December is a prime vacation month doesn’t help things much, either!  (If you sense urgency here… Good.  That’s the point!)

So, Kevin.  How Do I Make Sure My Loan Closes Before My Rate Lock Expires?

I’m so glad you asked!  The best ways for you to help your Florida mortgage broker close your loan before your 30-day rate lock expires is to be as responsive as possible with all of your “homework” items:

  • Return to your mortgage broker, by fax if necessary, all pay stub, insurance declaration pages, bank statements (all pages, even that blank one at the end!), etc. the same day they are requested
  • Appraisers are getting busy again, so be sure to schedule your required appraisal as soon as possible
  • If a closing date is scheduled, stick to it.  Delaying your closing date by even one day can negatively impact your rate lock.

chimpTime is money folks, in this case… Yours!  Mortgage rates are hovering around 3-year lows, and the number of homeowners refinancing their loans is growing.  Lender underwriting departments are so overworked now that they’re screaming like a pack of scalded chimps – and the problem will only get worse!  If you’ve been thinking about refinancing your Florida home loan, the time is now.  If you already have a loan in system, please be sure to stay on the ball to keep your 30-day rate lock from expiring.


THE FLORIDA HOME LOANS SPECIALIST

I hope you enjoyed this article, you can find more like it at my Florida Mortgage Blogger site. As your Florida Home Loans Specialist, I’m here to answer any questions you might have about the mortgage industry. If I can help you locate financing for your Florida home purchase or assist you with a refinance, please do not hesitate to contact me at 863-604-3019.

Advertisements

Mortgage Rates Remain Low… But May Rise on Week’s News

Hi fellow readers! Today I would like to take this opportunity to introduce my guest author and Florida Home Loan Specialist Kevin Sandridge of Signature Home Funding. He will periodically provide you with the insight of the mortgage industry on my blog. I’m sure you’ll enjoy his reading and insights as evidenced by his blog posts.


The Unemployment Rate is expected to reach 6.8 percent in November 2008

Mortgage markets rallied last week thanks to Government action that took mortgage rates lower for the second week in a row. In the face of less than stellar housing numbers and signs that our economy may still be slowing, mortgage rate shoppers here in Winter Haven and Lakeland, Florida were presented with a few reasons to rejoice.

  • Citigroup was “rescued”
  • Wall Street approved of the new economic team
  • The government promised to put up $600 billion to buy investment-grade mortgage bonds

Working together, these three things contributed to mortgage rates that are at lows we have not seen since the first part of 2008 — in some instances seeing as much as a full percentage point reduction off the offered rate.

Refinance Activity Increases

The rate drop has been no secret to homeowners as they rushed to refinance their mortgages in near record numbers — especially those with ARMs who might be facing sharp payment increases.  Proof of this comes as at at least one national mortgage bank reported that more loans locked on Tuesday, November 25 than were locked during the first 24 days of the month combined.  This is all very exciting. However, low rates rarely stick around.

The last time that rates dropped like they did last week, markets bounced back within a week and rates returned to “normal.”  We might very well see that happen again.

Fed Members Due for a Big Show

This week, 5 members of the Fed will appear publicly, including Fed Chairman Ben Bernanke.  The Fed’s next meeting is scheduled for December 15, and as always, markets will be looking for signs as to what, if any, changes the Fed may make regarding the Fed Funds rate. As you know, when the Fed Funds Rate falls, mortgage rates usually rise – at least initially.

Retailer Same Store Sales Figures Due Thursday

This week also provides us with retailer reports regarding their November “same store” sales figures.  These numbers should help us gain a better understanding of exactly how healthy the economy really is, as consumer spending comprises two-thirds of it.  If same-store sales come in asexcessively low, expect calls for the Fed to deliver a large rate cut.

Friday Jobs Report

November employment numbers arrive on Friday.  These numbers have been terrible all year, so November job numbers will have to be very, very bad  – causing a huge spike in unemployment in order for us to see any significant impact on mortgage rates.  This said, we could actually see a bit of an uptick in mortgage rates as more out of work Americans could result in greater number of mortgage defaults across the nation.  If the Fed cuts rates, esp, weak jobs data should be harmful to mortgage rates because more out-of-work Americans could result in more mortgage defaults across the nation.  If the Fed cuts rates, expect mortgage rates to climb for sure.

(Image courtesy: The Wall Street Journal Online)


THE FLORIDA HOME LOANS SPECIALIST

I hope you enjoyed this article. As your Florida Home Loans Specialist, I’m here to answer any questions you might have about the mortgage industry. If I can help you locate financing for your Florida home purchase or assist you with a refinance, please do not hesitate to contact me at 863-604-3019.