The Down Down Up Lock Game:
Sorry I am late today, we got lucky on rates. This is reality in action. About 10AM most banks have posted their rates. Not always, if the market is volatile there may be a delay.
In this scenario the borrower didn’t want to lock, hoping to save money. So the down, down, up lock game is my opinion on how people should lock. Mind you, last week I felt rates would go down as December is typically an up month. It was last month as rates grew by about 1/4 per cent.
The rules of the game is that the borrower contact me each day - if rates go down - good. If not I suggest they lock. Each day rates go down, ride another day. They day they go up - LOCK. Here again, it is the borrowers responsibility, it is always a gamble. It is a gamble no matter when you lock. Also note, if you are on the borderline for qualifying or if I sense a higher rate makes you or your spouse upset I will push you to consider locking.
What happens if you cannot get ahold of me? Well that is a problem isn’t it? I must do the lock and I must provide you a confirmation sheet verifying rate and terms. Where was I today? What if rates went up? You would be super angry as I was plainly just not available.
We got lucky. Rates don’t really move in 1/4’s or 1/8’s. They move in decimals in fee amounts. You pay a fee one way or another. I will explain that on anothe post. We got lucky as the rate I am using is 5.75%. The fees for that rate improved by .614 points. So if you were borrowing $300,000 you just saved $1842.00. Dang you are a lucky duck. So am I in reality, as I was not available.
What if you didn’t call me? That means you aren’t playing the game right. If you don’t call what do I do? Today was great. You may have been better off locking. The improvement was so good, you may have said lets take it. If you don’t call, how will I know what to do?
Anyway, what will tomorrow bring, as you aren’t locked yet. Larry Cragun
