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Old 03-15-2010, 06:44 PM
 
4 posts, read 5,778 times
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Hi everyone, I recently signed a purchase agreement for my new home but need some advice regarding my loan.

When I spoke with my lender on Sunday 3/7, I was quoted a rate of 4.5% with .5 points or 4.375% with .875 points for my 20-year loan with 30% down (conforming). I thought this was a good rate and decided to go with this lender. Since rates had just spiked some on 3/5, I thought I would wait and float before locking in the rate and hope it would come back down a little.
The next morning (3/8), I was told rates had gone up and it was now 4.625% with .5 points or 4.5% with .875 points, basically a jump of .125%

Since then, it's gone down a little to 4.625% with .5 points or 4.5% with .75 points and held steady at that.

I don't want to unfairly question my lender's integrity, but the limited data I have access to - treasury and 30-yr MBS yields - doesn't seem to indicate that rates would have jumped so much between 3/5 and 3/8 and yet held pretty much steady after that.

Can anybody here with access to how the rates of major lenders (particularly one that starts with W) moved over those days corroborate this movement for me? I really want to just trust my lender on this, but I also need to know that I am prudently handling my young family's finances.

Would really appreciate any insight on this.

Last edited by buddeyp; 03-15-2010 at 07:07 PM..
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Old 03-15-2010, 07:06 PM
 
4 posts, read 5,778 times
Reputation: 12
Sorry, I meant 4.625% instead of 4.675% because of course there is no such thing... (Have now edited the main post)

Thanks in advance, anyone who can offer any advice.
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Old 03-15-2010, 07:43 PM
 
Location: Wake Forest, NC
835 posts, read 3,672,178 times
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Regardless of rate movement I have 3 questions.

1- Why are you working with somone you don't trust?
2- When is your closing date?
3- Are you ready to lock?
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Old 03-15-2010, 07:52 PM
 
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Thanks for the reply, dad2jules. Appreciate your concern re question 1, but I am a new homebuyer and I don't have an established relationship with any lender so it wouldn't be fair to say I do not trust this lender any less than anyone else I might possibly work with. In fact, I probably trust this lender the most, but that doesn't mean I would feel comfortable not double-checking everything when such huge amounts of my hard-earned savings are involved.

I guess my concern is whether my loan officer forgot, probably unintentionally, to quote from the slightly better set of rates that I was quoted from when I decided to go with this lender (since I had brought along a competitive set of rates from another bank), and I'd just like to see if there is any justification before I raise what could be an embarrassing conversation for both sides.

My closing date is mid-april and yes I am ready to lock. Thanks again.
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Old 03-15-2010, 08:58 PM
 
Location: MID ATLANTIC
7,846 posts, read 19,164,896 times
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Here's the day to day action on the MBS from 3/5 to 3/10 on the attached pdf. Whoever you are talking to is giving you the straight scoop. We got worse on 3/8, and better again on 3/9. Read from the bottom up. The 3rd column is in 1/32s. 4/32 = 1/8 point, 8/32 = 1/4 point. Red is negative (loss), green is positive (price improvement)

What I won't do is compare the rates you were given compared to what the rest of the market was quoting - as you can see there is a whole lot more that goes into pricing
Attached Files
File Type: pdf MBS SCREEN.pdf (21.6 KB, 200 views)
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Old 03-15-2010, 10:25 PM
 
4 posts, read 5,778 times
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Hi SmartMoney,

Thanks so much for that! Really appreciate it. So the drop on 3/8 was enough to worsen my rate from 4.5% to 4.625% with the same points?
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Old 03-16-2010, 06:55 AM
 
Location: Wake Forest, NC
835 posts, read 3,672,178 times
Reputation: 648
Nothing wrong with checking and being sure for piece of mind.

You have to know your exact closing date because 30 days is 30 days on a lock not 31- extensions cost money and there not cheap. As you can see rates move(or can move) everyday.

The way to think about mortgage rates is just like the value of a mutual fund. They are made up of a series of smaller investments and the value is fluid changing all the time with the demand for it.
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Old 03-16-2010, 08:27 AM
 
Location: MID ATLANTIC
7,846 posts, read 19,164,896 times
Reputation: 8671
Quote:
Originally Posted by buddeyp View Post
Hi SmartMoney,

Thanks so much for that! Really appreciate it. So the drop on 3/8 was enough to worsen my rate from 4.5% to 4.625% with the same points?
The short answer is yes.
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Old 03-16-2010, 09:40 AM
 
Location: Plano, Texas
1,676 posts, read 6,535,262 times
Reputation: 688
Dont wait any longer, lock your loan.
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