After 100 days of relative calm, volatility is returning to mortgage markets. Over the last two weeks, lenders have issued 3-and-a-half rate sheets per day on average, including a series of 5-rate-sheet days.
A “rate sheet” is a mortgage lender’s official pricing menu and each time a new rate sheet is issued, it means that mortgage rates have changed.
It’s a scary time to be shopping for a home loan. By the time you gather competing lender rate quotes and compare them on their merits, the markets are apt to have changed and those Good Faith Estimates are worthless.
On a 5-rate sheet day, that leaves 1 hour, 36 minutes to shop for and lock a loan.
Making matters worse is that mortgage rates have been on a rocket-ride toward 7 percent since the start of June. Each new rate sheet represents another tick higher and, at this point, the 4.500 percent rates from mid-May look almost quaint.
But just because rates are rising doesn’t mean that low rates are gone forever. For one, since 2005, mortgage rates have tended to rise in the summer months and fall through fall. Secondly, the Fed has said that low mortgage rates are key to an economic recovery and will likely accelerate support for the market. Therefore, don’t be overly miffed by today’s higher rates.
If you’re a home buyer, remember that you can always refinance to a lower rate when the market opens up. And, plus, if you’re certain that rates will fall going forward, make sure to minimize your closing costs so you don’t end up “double-paying” when you refi.
For would-be refinancers, the advice is a little bit different.
Today’s higher rates may have priced you out, so try to make sure you don’t miss your “target rate” the next time around. Call your loan officer and ask him to monitor the market. Then, when your target hits, your loan officer can just lock it for you on the spot and not have to worry reaching you by phone or email before new rate sheets get issued.
If your “loan officer” is a your existing lender’s Call Center, by the way, don’t expect this level of service. Consider calling or . I’d be happy to work with you.
Dan Green is an active loan officer for Florida homeowners. Reach Dan via email at or call toll-free to 877-DAN-GREEN.
