The first week in June inspires thoughts of lazy afternoons on the beach, stunning sunsets, camping, and family vacations. The mercury on the thermometer is not the only thing rising; so are retail mortgage rates. If you've been reading, you'll notice that mortgage rates jumped almost one full percentage point since Memorial Day weekend.
It spooked me to the point of changing my overall bias towards locking-in loans at application rather than cautiously floating rates to try and "snag the bottom". Here's a look at what mortgage professionals who maintain an online presence are saying:
Dan Green from Cincinnati highlights why folks should shop for lenders, not loans:
The frenzied pace of change is making it next to impossible for mortgage applicants shop for "the lowest mortgage rate". By the time a buyer talks to competing lenders and gather the rate quotes, it's time to start the process over again. It's giving Skyline-style heartburn to home buyers in Cincinnati, for one.
Rhonda Porter from Seattle ponders a penniless Fed, still trying to keep rates low:
Justin McHood in Phoenix reminds us that higher mortgage rates mean less buying power:
Although I don’t remember what 10%-20% interest rates felt like, I can remember well what 7% interest rates felt like – it wasn’t that long ago! If interest rates rise to 7%, the P/I payment on a $200k loan will go up by $327 per month.
Are we going to see 10% interest rates in the foreseeable future? I don’t know, I will leave that to the experts to pontificate about. What I can say for certain though is that as interest rates rise, people are going to buy “less of a house” than they are currently buying.
Orlando's Chris Brown explains why you have to shop for a loan quickly:
As markets worsened, selling begat more selling, amplifying Wall Street’s total losses. As mortgage bond prices fell, mortgage rates went up. By a lot.
Mortgage markets are notoriously fickle and yesterday’s events proved it. Days like Wednesday are precisely why insiders recommend shopping for mortgage rates in a compressed timeframe. The faster you finish, the lower the risk of losing low interest rates to new market conditions.
If you're shopping for a home loan, you can see that the loan quotes you receive are less important than the lender who issues them. Find a lender with whom you feel comfortable. If you choose to work with me, you can: