So you hear the news, mortgage rates are falling. You start looking at rates online and think you could really save some money if you refinanced your home. You call your lender and he gives you a list of the documentation to prepare. It takes you a few days to get your information together. You call him when you are ready and he says, great, but rates have gone back up. Frustrated, you put everything away and stay with the loan you have. Sound familiar?
How Can You Be Sure Not to Miss Out when Mortgage Rates Drop?
The best way to capitalize on rate drops is to submit a complete file to your lender before rates drop. Submitting a complete file simply means that all of the necessary documentation has been received, processed and approved by a lender. Then, get back to your daily life and let your Mortgage Advisor shop rates. When rates drop below your current rate, he should call you and ask if you want to lock the rate and go through with the refinance or wait to see if rates drop any further. Submitting your file does not require you to refinance your home, but does put you in a much better position when rates do drop.
Why is Submitting the File Before I am Ready Better?
Because all of your paperwork has already been received and approved by the lender, your file is on the top of the pile when you do decide to lock your rate. As you can imagine lenders are inundated with files when rates drop. When rates are really good lenders can get so many files that they simply cannot process and complete all of them by the lock dates and some may lose the interest rate even if they submitted all their documentation. When your file has already been received, processed, and approved all the lender needs to do is execute the loan.
Never Want to Watch Mortgage Rates Again?
One of the services we offer our clients is our Auto Lock Program. We collect the necessary documentation, even before the client is even ready to refinance, and we give our clients the option to sign an auto lock form. The auto lock form allows our clients to pick a target rate that would cause them to refinance their loan. When that rate becomes available, they are automatically locked in allowing them to take advantage of the narrow window of low interest rates. Having our clients submit their documentation ahead of time, combined with signing the auto lock form will enable our clients to take advantage of every cost saving opportunity.
If you would like to never worry about shopping for mortgage rates or programs, give us your name and email and we will send you some additional information. This service is available to every home owner, no matter who originated your loan.
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Chris Williamson is a Mortgage Advisor with Mortgage California specializing in San Mateo Mortgage.
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