Lock In Your Mortgage Rate

Wow, there is a lot of volatility in the markets lately! I subscribe to a service called the Mortgage Market Guide and it has been like watching a yo-yo lately. There is no trend and nothing is very predictable when it comes to mortgage bonds.

With that said, the market volatility is not the only reason to lock in your mortgage rate these days. The investors who buy the loans from mortgage companies after they get packaged up with others have varying appetites. The changes that they are making in terms of what they are interested in buying and how much they are willing to pay are leading to an ever-changing set of guidelines for mortgage lenders to follow. Because of this, lenders are only able to honor or "grandfather" loans that are locked in. Essentially, we'll commit guidelines to you if you'll commit to doing business with us by locking in.

So, when you are getting started on a loan application, consider locking your rate to protect your rate and your ability to get approved!

Fannie Mae, Freddie Mac bailout and me

We've had a little bit of time to digest what this bailout / takeover / expansion of government - whatever you want to call it - means for the world of mortgages going forward. It will certainly bring stability and create some sort of a floor or foundation for us to move forward. Over the last six months we've seen mortgage rates hit a low, stop and then radically turn upward on a few occasions. The windows to grab low rates have been really small; sometimes a matter of hours. This was likely because investors buying bonds didn't have any certainty about the stability of the entire market.

Our hope going forward is that the interest rate drops we see will be more sustained. However, my advice to homeowners who are considering a refinance or homebuyers considering a purchase is this -- work with a lender who understands the markets, don't be greedy about rates and get your application in so that you have the ability to lock quickly if the market does happen to turn.

I will continue to post about Fannie Mae and Freddie Mac and what it all means to you, as we learn more. For now, we can at least say that we've gone from a pending implosion in the mortgage market altogether to a much more positive outlook.

Fannie / Freddie and Mortgage Rates

Over the weekend, the government took unprecedented steps to save the mortgage market by taking over control of the two largest buyers of mortgage loans, Fannie Mae and Freddie Mac. While this news, and all of the ramifications of it, still needs to be digested and analyzed (as though we didn't know it was coming!), it may prove to be very good news for mortgage rates and the Triangle real estate market.

Why? Mortgage rates are based on what happens in the bond market. The bond market (and stock market) doesn't like uncertainty. Put simply, this move adds a little certainty to what has been a really uncertain market. So far this morning the bond market and mortgage rates are really liking the news! If this is sustainable, the news of lower mortgage rates may very well be what is needed to release some of the pent up demand for homes that is likely out there in the Triangle market.

STAY TUNED!