Hello! I'm David Beadle, here is what's happening from RateAlertNow.com.
The mortgage business is just like most businesses. There is the retailer, the wholesaler and the manufacturer. The exact amount of time it takes for a rate change to work its way from the financial markets to your local mortgage originator can vary from a few minutes to several hours.
You have an advantage in a rising rate environment because there is normally a gap, between the moment you receive a RateAlertNow text message from me and the moment when the lower rate may no longer be available to you.
Of course, it is important for you to work with a local mortgage professional, who is available to accept your lock request by telephone on a moment's notice.
The last thing you want to hear, is a voice mail message, or later discover that the originator did not act instantly to hit the lock button on the wholesale lender's website.
What most applicants don't understand, is that there is always a 5% rate. It's just a matter of how many or how few points you will have to pay for that rate.
It is also true that there is always a 4.875% rate and a 5.125% rate on either side of the 5% rate. Generally, an eight of a percent up or down for the middle rate is worth half a point. Even an eight of a percent increasing rate carries a serious cause to you.
The half point which I just mentioned is worth $500 on a $100,000 alone. So if rates rise in a particular day from 5% to 5.125%, what is actually happening is that the 1.0 rate is now 5.125% instead of 5%. Therefore, if you still want the lower 5% rate, it will be 1.5 points which will cause you $1500, meaning $500 etcetera using our theoretical example to buy that 5% rate.
You will note that the 4.875% rate on the charge is shown as 2 full points also up half a point from its previous level.
The beauty of this video tutorial is it you can play it again and again to look at the chart which was just on the screen, in order to confirm your understanding of how the process works. That's what's happening. I am David Beadle.
For full details on my Real-Time Mortgage Red Alerts to help you beat the system. Visit redalertnow.com and check back there each business day for my latest regular mortgage rate update.
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