The Refinance Boom that is here – and Reserve a Rate Program
Steve Knox
December 1st, 2008
Question: Columbia Funding Mortgage predicted the historically low interest rates that surprised consumers on Tuesday, November 25th. On what did you base this prediction?
Steve: We closely monitor mortgage backed securities and the release of key economic reports to provide our clients with credible information about the trends in the mortgage market.
Question: In our October interview you urged your clients to sign up for your reserve a rate program. This time around were you able to quickly respond to the low interest rates for your clients?
Steve: We have already locked in about 20 clients who had instructed us to monitor and “reserve a rate” for them. However, with the Thanksgiving holiday we anticipate that many more clients will contact us early next week.
Question: What have you done to respond to this unprecedented refinance demand?
Steve: We planned ahead and have prepared our clients. We are taking late evening and weekend appointments. Most importantly, we are locking all of our loans for 45-60 days.
Question: Why is locking longer term so important?
Steve: Because of our experience, we know what happens in a refinance boom. Lender’s become back logged and rate locks can expire before the loan closes. We protect our clients by locking long enough to ensure the rate promised is the rate delivered and a stress free transaction.
Question: Do you think these low rates will only last a few days the way they did in January of 2008?
Steve: Our assessment is that 30 year fixed interest rates will below near or below 6% for at least a couple of months but that interest rates will be volatile during this period and we may see rates as low as they were this past week.
Question: What advice would you give to consumers now that these low rates are here?
Steve:
1) Do not get greedy! Know what you want and take it when it is available.
2) Partner with one trusted mortgage adviser who understands the relationship between interest rates and mortgage bonds and instruct that lender to monitor rates for you.
3) Use the “reserve a rate” program
4) Use a local lender who has a vested interest in keeping you as a long term client and earning your future client referrals.
