Mortgage Blog

I do not know why I choose this topic. Just want to tell a few stories, then you will know what I meant.

I have one client who is on 4.375% 30 yr fixed loan with loan amount around 700k. We quoted rates from 4% to 3.5%, and now his goal is 3.375%. The goal is not to get the lowest rate. Instead, his goal is to save the money. I told him that he already saved a lot money by lowering the rate from 4.375% to 3.5%. And the lower rate of 3.375% was nothing compared to the big savings from 4.375% to 3.5%. What if he got the rate 3.375% one year later, or what if he would never get it(I know he should be able to get it).

Another one: borrower was on 30 yr fixed 4.25% for about 1.5m loan, then I locked the rate for 3.875%, then he asked BOFA got him 3.75%, and he asked me whether he could get 3.625% from me. I told him, if the direction was wrong, no matter how much you tried, the result would not be good. My suggestion to him was actually to get 7/1 ARM instead for around then 3% rate.

Another one: purchase loan amount 1.5m with higher closing cost, we know borrower will get lower rates for the same 1.5m loan amount with refinance. The borrower would call 7-8 lenders to compare the rate(though he chose me to do it). I told him that he should focus on closing. We know that he would do another refinance any way. And he would get a lower rate. Then the focus at the moment is to get a smooth closing. Is it not?