“If you do not raise your eyes, you will think that you are the highest point.”–Antonio Porchia
I got a call from a client who received a letter that offered a 2.75% mortgage. We are in the middle of refinancing his 30-year fixed rate loan. He specifically came to my office to show me the letter, which you can see below with questions on whether or not I can get him such a low rate:
He only saw the numerical rate, but did not seem to notice that it was offered for a 5 year fixed FHA program that has an additional 1.25% monthly mortgage insurance payments. Some lenders spend thousands of dollars on mailings just hoping to catch clients who are drawn in by the low rates. After explaining about the “fine print” of the letter, I offered my client a 2.75% fixed for fifteen years with the closing costs. The only problem was that his monthly payments would be about $1,000 more than the loan fixed for 30 years at a 3.50% rate with no closing costs (which he ended up choosing).
Since interests are so low, we have been refinancing our clients’ loans that closed as early as this past April. One such client wanted her rate to be 3.375%. She checked rates online and called me almost daily to share her findings. My response was always the same, let me check my computer. We have a special program that reports daily rates from different lenders. Sometimes the information changes a few times a day, but at least this information is reliable and we can lock the rates that we see on our computer program. Because lenders are overwhelmed by the volume of applications, we have to lock rates for 60 days (to complete the loan), which can be different from the rates advertised online by East Coast lenders for a shorter period of time.
In this client’s case, we decided not to lock the rate but let it “float” instead, until the lender receives an appraisal report and the majority of conditions. At that time we can lock for 30 days. It is a gamble. In my book, you will find a similar case, but with a twist and a surprising outcome.
In spite of today’s low rates, some of my clients procrastinate, perhaps being overwhelmed by the process. My assistant Samantha is very good at helping make it a smooth process. Please act while rates are still very low.
P.S.
The gift giving season is upon us. I am sure that some of your friends will be very grateful to receive my book, The Mortgage Game: The 5 C’s and How to Connect Them from you as a present. You can also download it for your Kindle or Nook. If you need a more elaborate present, feel free to contact my friend Phil Wiseman at UPP (Unique Product and Promotions). He sent me a basket to congratulate me for my book publishing. It was awesome.
P.P.S
Last weekend I was in Dallas, Texas for a conference. We stayed there with friends and their neighborhood had a lot of elaborate Christmas decorations. The image above is my creative rendition of a tree covered with lights.
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