Lower rates can become a challenge!

Uncategorized Dec 21, 2023

People love lower rates. Everyone likes to pay less for the same thing. The issue with lower rates is that everything is NOT the same. Programs, LTV’s, credit scores, property types, and a bunch of other factors are involved in what a customer may choose to pay or not to pay for a residential mortgage loan. Mortgages are NOT a simple commodity like Bitcoin or a stock price. Even barrels of oil have different prices based on quality.

As rates go lower, we also see an emotional attachment to numbers. 6.99% is much less in the eyes of the borrower than just .01 less than 7%! We all know this. So, when people start talking about lower rates, the discussion of “what rate you can get”, is often not a simple answer. You also have to consider the cost of waiting for rates to “find the bottom”, even if you knew where the “bottom” was going to be! My point is, broadcasting to the world that rates are going lower may actually cost you business if those that were in the process of buying, now stop and wait to see how things go before making a move, and then the cost of the home they wanted to buy keeps rising faster than the rate they can obtain goes lower! You also run the risk that people you have already locked or closed, choose to go elsewhere or refinance leaving you holding the bag on an EPO!

Rates are always moving. They never go lower as fast as they go higher, and even when rates were in the 2’s. people were sitting on the sidelines waiting to see if they could get 1%! Remember all the people just a couple of years ago that were going to wait until rates came back into the 3’s? How did that plan work out?

The old saying “Buy the house and rent the rate” still holds true. In most cases, you can lock in the price of the house today, and then look down the road to refinance if an opportunity presents itself to do so. However, many people wait for the rate, and lose the opportunity because the rates never get low enough to offset the total higher price!

Rates are very personal! That is why you always keep the person in the process!

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