06/14/2022
FOR MY REALTORS and HOUSE SHOPPING FRIENDS:
Yesterday was one of the five worst days for mortgage rates in the past twenty years. At one point , Mortgage Backed Securities were down more than 160 basis points.
What does that mean? That means if you were quoted a 5.5% on Friday on a $300,000 loan, today, the same rate would be 6.0%.
And what if you still wanted the 5.5% rate? Well, you could choose to buy down the rate.... at a cost of $5,000.
That's right, your 5.5% quote on Friday is now a 6% and likely higher.
This is very abnormal and pretty much unprecedented, but I promise as a mortgage broker myself, that your loan officer is not lying.
If you were pre-approved a few weeks ago, make sure you reach out to your loan officer again. You may not qualify for as much as you qualified back in May especially if your debt to income ratios were already tight and you barely got approved.
Realtors have your clients who are shopping have their pre approvals checked with their lenders. Those higher rates could lower their shopping budget. Better to know now than after an offer is accepted and submitted to underwriting and possibly get rejected.
And also remember not to get mad and take it out on your lender/loan officer. We don’t set the rates. We don’t make any more compensation whether the rates are at 3% or 6%. We are just the messengers of the current market conditions.
