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Old 09-08-2008, 08:21 PM
 
Location: Plano, Texas
1,676 posts, read 6,334,056 times
Reputation: 684

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Since we are talking rates, in my opinion rates will get lower. If you are close to closing, like with in a week, maybe you should lock, take your gains and run. If you have several weeks to months, i think rates could get lower. First of all, the biggest enemy to rates is investor lack of confidence in buying Mortgage Backed Secuities. As investors buy MBS, the price goes up causing the yield(interest rates) to drop. With the government basically taking over Fannie Mae and Freddie Mac, the government has basically turned MBS's into US Treasury notes which are guaranteed by the full faith of the USA. This means they cant lose any money so investors who buy fixed income investments like bonds are flocking to MBS as they are paying almost 6% and treasuries paying under 4%. With the spread being so wide, investors will likely keep buying MBS. Next, inflation is coming down. One of the biggest enemies to mortgage rates is inflation, if inflation is on the rise, rates follow and when inflation subside, rates fall. Oil prices are dropping, commodity prices such as wheat, corn, sugar are falling(i actually paid 2.48 for a gallon of milk this weekend at a walmart in Plano texas) with much of this being pushed by a strengthening US dollar. Next would be our economy, it is not booming and generally speaking bad news on the economy equates to lower rates. Lastly would be jobs. Unemployment is rising which is helping to keep labor costs low. Like i said earlier, one of the biggest enemies to rates is inflation, well there is something called wage based inflation. When a lot of people are out of work, companies do not have to raise salaries to attract workers, vs if unemployment is ver low, employers have to entice workers by paying more money. Since our ecomony has lost about 600,000 jobs so far this year, that is keeping companies labor expenses low keeping prices low. This is just my opinion and i could be wrong. I spend a lot of timing research this subject but something could happen tomorrow that could change everything.
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Old 09-09-2008, 09:56 PM
odu
 
40 posts, read 103,551 times
Reputation: 15
Default closing tomorrow

I'm closing tomorrow afternoon. I've locked in at 6.375. Is it too late to get a lower rate? I believe I can do a floatdown
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Old 09-09-2008, 09:59 PM
 
Location: Charlotte, North Carolina
5,137 posts, read 15,095,994 times
Reputation: 1007
you should be able to...but it will need to go back to the underwriter.

Quote:
Originally Posted by odu View Post
I'm closing tomorrow afternoon. I've locked in at 6.375. Is it too late to get a lower rate? I believe I can do a floatdown
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Old 09-09-2008, 10:09 PM
 
Location: Cary, NC
1,036 posts, read 3,627,833 times
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Quote:
Originally Posted by odu View Post
I'm closing tomorrow afternoon. I've locked in at 6.375. Is it too late to get a lower rate? I believe I can do a floatdown

You might be able to, but it also might delay closing. I have tried to renegotiate rates 24-48 hours before closing and they always warn me it will delay the closing.

Typically the "pricing desk or department" needs to go over it an approve/deny the request. Sometimes the underwriter needs to make a few changes. Then the closing department needs to change the loan package and send a new one to the attorney to reflect the new rate, payment, TIL and other items affected by the change.

At some lenders all this can be done in a few hours, at others it can take a few days. Call the lender in the morning, it never hurts to ask.
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