Juicy Estates: Mortgage Blog

Read Juicy Estates and Save $93,415!

As evidenced by the melt down of the mortgage market over the past 18 months getting a mortgage is now, and should have always been about advice, not price.  

A client called me on Monday evening after reading the most recent South Florida Interest Rate Update.  He was being told by another lender that he should ”lock your rate immediately and you need to give me your credit card info to pay the rate lock fee”.   

My advice to him was to wait until Tuesday at 2:00 pm to see what the market reaction would be to the Federal Reserves announcement regarding the Fed funds rate and their policy regarding the credit markets.  The financial markets and traders had a .5% rate reduction by the Fed priced in, so when then the Fed surprised with a .75% to 1% cut and re-affirmed it’s intention to buy long term bonds including mortgage backed securities, mortgage rates dropped like a rock.  The Fed’s action and more importantly their words resulted in rates dropping a .375% to .5% all the way down to 4.75% for a 30 year fixed rate with no points.  

As a result of reading this post and contacting me I was able to lock his rate for the purchase of his new South Florida home at 4.75% (for information on why I advised him to lock on Wednesday click here) with no rate lock fee and no points, just good advice.  The result of the lower interest rate is that over the life of the loan my client will pay $93,415 less in interest….now those are juicy savings!

This entry was posted on Thursday, December 18th, 2008 at 10:32 pm and is filed under Home, Mortgage News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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