Lately I’ve felt like I’m sitting in the front row of a roller coaster with the wild swings in mortgage interest rates. Mortgage rates have been at 50 year lows this past week – the lowest levels since Freddie Mac started keeping track with their weekly mortgage survey. This is largely due to fears in the market caused by the coronavirus. The Dow has been taking wild plunges, then will rally only to dip again. Mortgage rates are based on bonds (mortgage backed securities) and when investors are pulling funds from stocks, they will often seek the safety of bonds. We’ve seen that this past week when rates dropped to the lowest levels I have seen in my 20 year career as a Mortgage Professional. We are in uncharted territory.
If you look at this chart, compliments of Mortgage Coach, it illustrates just how long it takes for mortgage rates to drop and how quickly mortgage rates can rise.
On March 9, we had the lowest mortgage rates and clients who had their applications prepared and ready to lock, captured extremely low mortgage rates. Later that morning, rates started to quickly reverse and those who were either still working on getting their application started or who wanted to wait to see if rates would go lower, wound up having to pay a little more for the same rate they would have that morning. Rates have been continuing to increase since the 9th of March. When I captured this chart from my ap, bond prices had moved 55bps as of 8:27 this morning! Remember, mortgage rates change constantly and in markets like this, they change throughout the day…hopefully by the time you’re reading this post, we’re back “in the green” with pricing. 🙂
With all that said, mortgage rates are still very low AND I think the volatility in the markets is not over. If you want to grab a super low mortgage rate, as you can see from this chart, you have to be ready!
Here’s how to improve your odds of getting a low mortgage rate:
- Submit your loan application. You do not have to lock in your rate until you are ready to do so. However, preliminary underwriting can take place, which will also allow us to determine if your refi qualifies for an appraisal waiver.
- Allow your credit report to be pulled. This helps to make sure your scenario is being priced accurately AND if there is any work that needs to be done on your credit, we can provide advice to help get your credit to a better position.
- Provide supporting documentation for your refi. A fine tuned list can be provided once your application is submitted. However, a good place to start is your most recent W2s, paystub, bank statement (all pages) and photo ID. Tax returns may be required if you are self-employed, are paid commission or have rental properties.
You may or may not want to have an appraisal ordered, if one is required. Worst case, should you decide to not proceed and an appraisal has been done, you may be out the cost of the appraisal as it’s a third party fee. If you’re pretty certain that you are going to refi then getting the appraisal done in advance may save you some time as appraisers are getting backlogged due to the large volumes caused by the refi market.
Which brings up another point on why to start the process early, even if you are not ready to lock yet…all aspects of the mortgage industry are backing up due to large volumes of refi’s from the extremely low mortgage rates. Getting a jump on the process will get your application through underwriting, helping you to close quicker once you’re ready to lock.
My secure online application takes about 20 minutes to complete. I will not run your credit until I confirm I have your permission to do so. Please note: my Mortgage Loan Officer License is for homes located in Washington state only.
I’m not sure that we’ll see rates go back to as low as what we had on March 9…but I think we’ll be close – or at least still at low enough levels where it really makes sense to proceed with refinancing.
I’m happy to review your mortgage with you to see if refinancing makes sense for you. You can either send me some basic information for a mortgage rate quote or email me your most recent mortgage statement and I’ll compare a Total Cost Analysis that compares your existing mortgage to current mortgage programs and rates.
Well…what are you waiting for? 😉
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