Rates are up 1/4% today over yesterday. On November 26th I said if you had to close your loan by December 23rd (basically within 30 days) you should lock. Click Here

Teresa Boardman picked up on this article and posted it on her St Paul Website. One of her visiters, an investor John Daly, felt I was wrong and proposed people should float. Click Here for that punch and counterpunching

Each business day I have posted a running score: John seemed correct with rates down 1/8% for several days running. I called floating a gamble. Well, today things have reversed, the 1/8% rate you were ahead these few days is gone.

I said rates go up faster than they go down. Today we lost 1/4%. I was correct.

Don’t look for rates to retreat in December.

I also said I encourage people who are floating to lock the minute rates go up. So if you are floating, my advice is to stop and lock now.

I will keep the score going daily for you and Mr. Daley:

Score today:John Daley and his followers have lost 1/8% on their rate by floating. It is a gamble either way.

Here is an explanation of todays jump
from The Mortgage Reports Blog by Dan Green

Larry Cragun

Larry - wrong so far.

One week ago I said to lock, using December 22nd as a closing date. Today for the same fees, the rate is down 1/8%.

So if you didn’t lock and are still floating, what do you do? You have to lock somewhere around the 18th as the rate must be locked to get your documents.

Here is what has been most common in my career. This was often my advice when like John Daly, I had a client wanting to float. John disputed my postion on Teresa Boardmans blog. The advice: Call me around 10AM every day and we will look at the rate. The moment the rate goes up, lock.

I have seen too many files in trouble because borrowers were trying to suck the last .125 from a rate. John proved me wrong here, and so far so good for him were he the gambler…..I mean the borrower.

So each day I will post the change for you. For both of or all of our peace of mind, lock now.

John’s score = .125 lower rate if he locked today.

See you tomorrow. Lar

If you locked, you should have taken an application. Your credit report should have been performed. Your lender should have you approved by automated underwriting. You should have received a copy of your good faith estimate, you should have a copy of a Truth In Lending Statement.

If you locked you should have a copy of a lock form from your loan officer verifying the terms of the lock.

We picked December 22nd as our closing date as later is dangerous with the Chrismas and New Year Season. Not a good time to close a loan folks. With that in mind you have only 19 days to close, probably 17 days maximum to sign, which means at most 14 days to be ready to have your documents created. Time is running out. Do you see why you need a good loan officer. In no time at all you are under pressure. If you close late, you may lose your lock. No one will be sure of funding you after the 23rd, too much is uncertain.

If you didn’t lock as the investor John Daly proposed, time is running out on that too, you have two weeks for rates to improve and in that two weeks they can go against you. Let’s check rates tomorrow. In reality, if you didn’t lock and do have a loan in process you will have called your lender every day to check rates. Heck you might have 14 or more phone calls to make, just about your interest rate. What a pain.

Larry Cragun.

If you have a loan in process and you will be closing within 30 days, it is time to lock. I believe that this is one of the typical Decembers where rates will go up. Economic forces are part of it, gas prices have climbed since the election, even the dollar is having its part.

Along with economic forces December is the time of year that most mortgage employees are encouraged to take their vacations. The market is slower and that is when management can afford its processors, funders, document departments, etc. to take time off. With that in the mix, it is less a priority to be quoting low rates.

My advice - lock now. Larry Cragun

Question: With news like the recent news below: Are rates likely to go up, or down? The answer is in the comments.

Jobless claims fell by 17,000 in

latest week

WASHINGTON (Reuters) - New claims for U.S. jobless aid fell by a more-than-expected 17,000 last week to the lowest level since mid-July, Labor Department data showed on Thursday, but the four-week average of claims changed little.

First time claims for state unemployment insurance benefits declined to a seasonally adjusted 302,000 in the week ended September 30, from an upwardly adjusted 319,000 in the prior week.

Full article click here

I wrote advice on this last week. Clicke here. The rate report today shows a rise, not huge but a rise. Todays average rate is now what it was 6 weeks ago. If you were floating, and didn’t follow my advice, you lost in your gamble. In general, when you qualify or the loan makes sense when you know your loan is within 30 days of closing, lock. Lock Lock Lock, and make sure your loan officer locked you when you told him to. Have a lock confirmation document in your possesion or you may be up the creek. My advice today is the same as last week. LOCK. Larry Cragun

NEW YORK (MarketWatch) – Treasury prices closed with sharp gains Tuesday, pressing yields lower, after bond market investors cheered an unexpectedly tame producer price report and new evidence that the residential real estate market is continuing to worsen. The latest reports take more pressure off the Federal Reserve to tighten interest rates at its monetary policy meeting on Wednesday. The rally was reinforced by safe-haven flows into bonds after news that the Thai military staged an apparent coup against Prime Minister Thaksin Shinawatra. The benchmark 10-year Treasury note rose 19/32 to 101-3/32 with a yield……

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Loan Officer: Mark Clawson: 206-999-2009