by Michael L. Baker, Sr. Mortgage Loan Officer at Affinity Mortgage.
I just got a call from a current client of mine, he wanted to know if we could break his interest rate lock because he just talked to someone that said rates on the 30 year will be at 3% by the end of the week. Let me first start off by saying thank you to this client for having the confidence in me to come to me first so I could explain my thoughts.
There are two flaws with this thinking though based on my decade of experience:
1. Banks aren’t so sure about that, and right now they are going to hold on to profits and not let rates drop too fast or too furious. The worst thing a bank could do is plunge interest rates and then watch as the rest of the world says “oh we over reacted, just kidding” and then seeing the global markets rebound from what was probably more than likely a knee jerk reaction to Brexit anyway.
- As a bonus point it is being said that a total British Exit from the EU is anywhere from 2-4 years out, so the full affects from the Brexit Vote won’t be truly known for years to come!
2. Our global economy is on much sturdier foundation than it has been in decades. I know it doesn’t always “seem” like that, but it is. And even under the most uncertain economic times we NEVER saw a 30 Year Conventional Mortgage drop to 3%. My thoughts are, if it didn’t happen then it ain’t gonna happen now.
However, we DO offer a Float Down Option to renegotiate your interest rate should they drop considerably lower during your rate lock in. So you get the best of both worlds, locked in to keep rates from going higher, and float down options should they get better! It’s just good business for us to close you on the VERY best interest rate we can get you during your loan process.
All of this brings up a great point though; if you don’t have an experienced Mortgage Loan Officer that can keep up with economic news like this and how it could or potentially will affect interest rates, you should.
PS, If it sounds like I can help you, please contact me directly through Linked In, email me at firstname.lastname@example.org or call/text me at 913-735-5363. If you’re not yet ready for a conversation, but you’d like to learn more about me and how I can help you or about the mortgage process in general, including great blog posts to send out to your clients, check out my website at http://www.michaelbakerhomeloans.com.