Ascent Home Loans

“Seize the day, and put the least possible trust in tomorrow.”

Horace quotes (Ancient Roman Poet. 65 BC)

The above words were never more true in today’s mortgage climate. As I mentioned in my previous blog, “Refinance and Purchase Why Not Wait?”, I explained why it was not wise to wait to lock in a rate at this time.  There are many of you who are still on the fence debating with yourself whether this is the time to lock your interest rate or wait.

If you are in the market to refinance, I am sure over the past weeks you have been getting quotes from various lenders. Go back and look at those rate quotes and do your own research. You will see that if you compare those quotes with the current markets they are considerably different. Rates are nearly 3/4 to almost 1 point higher in some instances.

For those who are looking for a rate in 4% to 5% range, your day will come once again. I do believe it will be sooner than later. But do not be fooled that those rates will be available for months on end. This economic crisis is not going away any time soon. Major parts of the new stimulus package currently being debated in Congress and the Senate will not take effect for 2 to 3 years once it is passed. There are still major problems with our banking system that will cause rates to fluctuate rapidly. When rates drop you have to be ready to lock your rate, and the best way to do that is to get pre-approved.

What does it take to be pre-approved? First, you must fill out a loan application. Second, your loan officer will pull your credit report and pre-qualify you based on the information on your application and credit report. Third, he/she must also cross reference your information against the ever changing Fannie Mae or Freddie Mac  underwriting guidelines.  Lately it seems these guidelines change with the wind. Lenders are raising credit qualifying scores at every turn. Fourth, you will need to supply your loan officer with the necessary documentation to send your file into underwriting.

Once underwriting pre-approves your file, the loan officer can float your rate until the right rate is offered.  Once both you and your loan officer agree on a current interest rate, the loan officer can then lock your interest rate in. It’s that easy.