The Difference a Day Makes...Don't Float Your Rates!

Yesterday morning I was quoting rates to a new client who is fixing his adjustable rate mortgage...by the time was able to proceed and lock just a few hours later; the rate quote was invalid.   Rates are very volatile in this market.   Here's an example of rates with the conforming 30 year fixed with one of the lenders I work with.

December 20, 2007 8:30 a.m. CST Rate Sheet:   5.625% at 1% origination/discount fee (APR 5.806%).

December 20, 2007 3:00 p.m. CST Rate Sheet:  5.625% now cost an additional 0.375% if you must have this rate (APR 5.841%).   Or your rate at 1% origination/discount is at 5.75% (APR 5.933%).

December 21, 2007 8:30 a.m. CST Rate Sheet: 5.625% now cost a little over 1.5% in origination/discount (5.853% APR).   0.5% in fee higher than just 24 hours earlier for the same rate ($2000 on a $400,000 loan amount).   If you just want to pay 1% origination/discount, your rate is now 5.875% (APR 6.060%).

Update 10:54 a.m.:  December 21, 2007 12:20 p.m. CST Rate Sheet: 5.625% is now at 2% origination/discount (APR 5.901%).  Or at a 1% origination/discount point, your new rate for a 30 year fixed is barely 5.875% (APR 6.060%).  This is just how pricing is working comparing the rate 5.625% and current rate paying a 1% discount/origination fee.  A smaller loan amount, lower credit score may prevent you from obtaining the 5.875% rate.   Sure enough...I publish my rates for Friday and they change!

And today is not over.   We could very well have other price changes.   If you're looking at refinancing your ARM into a fixed rate, it's time to get off the fence.  Waiting could prove to be an expensive decision.   Especially considering we have 30 year fixed rates under 6%, underwriting guidelines are in a tightening phase, credit score pricing for prime a-paper loans are going into effect with more lenders every day and products continue to be discontinued.

What the heck are you waiting for?

Friday's rates will be posted in a moment. 

By the way, not all lenders issued price changes and some offer live pricing over rate sheet pricing.   As a correspondent lender, it's great to have options of working with different lenders in this type of market.  The more resources I have to shop for my clients, the better!