The volatility of the mortgage interest forces money lenders to act faster than ever
Are prepared
The first four days in April were 40% of the applications that month, according to Scott Buchta van Brean Capital.
“The rates fell quickly. They bounced up again, but you saw many people coming in,” he said. “The thing that surprised us in April was actually the survey. Rates were never really below 6.7%, but you had a big reaction.”
Even when the rates have risen again, Mark Worthington, a branch manager at Churchill Mortgagesaid that preparatory work is the key. Customers must receive mortgage applications, even if the rates are not optimal at that time. If there is a dip, Worthington and his team are ready to lock that day.
“We always want to try to see what the markets do, both financial markets and stock markets,” he said. “Every day we try to find out what we can do to predict. And if we have a tendency, we let our customers inform our customers immediately, let them know that this is a potential, and we look for them and for them to be ready.”
Worthington says that the challenge is to know when you have to jump on a promising chance or wait for the expectation that the rates will fall even further.
“That is probably the most difficult part of the company, is the expectation and hope,” he said. “If you want a lender who prior coaching and advises in advance with a larger staff behind them, you may have a slightly higher interest rate, but your service levels and your convenience levels will be considerably better.”
He continued: “There are also mortgage companies that have very low staff, do not have a large product mix and do much more in a less advisory role. They can have a slightly different interest rate. But what I think if you really look at the interest rates in the market are most lenders within an eighth to a quarter point.”
Kevin LeiboWitz, president of Grayton Mortgageorders close ties with recent borrowers to keep for rapid recapture.
“Your recent home treatment people with the aforementioned market rates with the officer with which they close will probably be your best chance of refinancing quickly, because you already have the trust factor,” he said. “The analogy that I use is when it is time to pick up the car, we cannot determine what price is at the gas pump. It is just what it is. The same applies to locking a rate.”
Debt consolidation
Mike Brennan, president at National mortgage bankersSays that the consumer’s fault is at a record high, in combination with high equity, means that borrowers can consolidate the debt. “There is the possibility to look at what we call the exercise price, which means that if you look at the average mixed household rate, it is probably high sixes up to low seven, and so they now pay a higher rate. I have read many reports that say that there is a 6% potential rate for 6 million refis, which is a lot around Debt consolidation.”
He continued: “So first of all, it is about understanding when the rates reach a certain figure for that specific borrower, when it can be paid off in terms of high interest rates, good debts and consumer debt, with credit cards, car bills, student loans, and then what they can save at the monthly level.”
Buchtta agrees. “So for us, 6.5% is an important mortgage interest rate. At that time we are going from 4% to around 8% of the market. You go to around 800 billion borrowers that can refinance today, against 300,” he said. “But to get there, you have to get a 4% or a 3.5% 10 years, which is not in our prediction now. So tactical, what you have to do is … you really have to concentrate on your purchase channel, but be ready for these fast blips when the rates fall.”
