Current state of the market: The last part of December bad news just didn’t seem that bad to investors, who reacted positively, thus keeping the market bullish. But recently investors woke up to reality as the economy comes back to earth, with the market bearish in the first full week of January. The bond market has been a volatile roller coaster just like the stock market, but we have officially crossed the threshold of the historic low 30 yr fixed rates that were available in 2003. The December job loss numbers were just released from the Dept. of Labor, making 2008 the worst year for job losses since WWII.
This weak labor data should help president-elect Obama pressure Congress to get his bailout package cleared. The Federal Reserve was actively buying mortgage backed securities this past week, keeping mortgage rates trending downward and keeping origination volume high. Hopefully mortgage rates will hold steady to offset some part of the weak economy.
But, keep in mind, rates could begin to rise if the stock market recovers. Investors who moved to the relative safety of Treasury bonds will shift money back to Wall Street if it seems more profitable. If stocks are being purchased, the market has guessed that the economy is recovering. When economies recover, rates eventually go up to stop growth and fight inflation.
So how do we, at InSight Mortgage Group, help you, our loyal clients, get the best rate for your current financial situation?
Current game plan with my clients: All the upfront work gets done now so we are staged to pull the trigger fast if rates hit a predetermined target.
Here is a quick breakdown of the next steps:
1) We take a Phone Application which takes 5-10 minutes to make sure all other things are in check. Debt ratios, etc.
2) We Pull Credit to confirm your credit scores so you know where you stand
3) We Call an Appraiser and have him pull some comparable closed sales to confirm the value of your home is where we estimate & need it to be to have the refinance make sense.
4) We Email you the Loan Compliance documents for signatures
5) You fax/email back (asap) the Loan Compliance doc’s along with your income and asset documents (paystubs, W2’s, bank statements, etc.)
6) You schedule a time with the appraiser to do his inspection (once the rate is locked)
7) We receive your package, compile and move to underwriting. With increased volumes, the underwriting turn times are escalating up to 2-3 weeks.
In essence, we are getting everyone’s loans preapproved and ready to submit so that if we see the dip we can act fast, and lock. These rate dip “windows” typically last only a few hours sometimes, so it is about getting your documentation in order and being ready!!
My team and I stand ready to assist you, so just say the word. Please call or email, email@example.com We look forward to working with you.
Michele A. Cole