- Sacramento Real Estate Adventures - Your Sacramento Real Estate and mortgage blog!

4%!!!! What!

That is right!  For a couple hours yesterday afternoon we saw interest rates in the 4.5% range! Normally any time we see the Federal Reserve cut their Fed Funds Rate, as they did yesterday, the market does not always react the way consumers think. 

Remember that cutting the Fed Funds rates does not mean the interest rates suddenly drop for the typical mortgage.  In fact it often sends the market in a direction that results in slightly higher interest rates.  Then it takes a couple weeks for the market to settle down again and we begin to see reduced rates.

Well for a matter of hours yesterday we dipped our toes in the 4% interest rate pool!  Of course we were on the phone calling everyone we could so they can take advantage of the small window of opportunity.

Here are a couple of tips to make sure you are ready to strike if and when rates return to these levels:

1. Call your mortgage professional and find out what interest rate you need in order for a refi to make sense!
   They should be able to run the numbers for you to make sure you will benefit from the cost of the transaction (closing cost, title fees, etc.). A simple interest rate reduction is not the only indicator.
   
2. Find out what information they will need from you in case they need to lock your loan.
   Remember these discounted rates are often only available for a matter of hours. So unless you and your mortgage professional are prepared to act fast, you may loose your window.
   
3. Agree to an interest rate and cost ahead of time!
   This is what we are doing with our clients.  Once we have all of their information, we get really clear on what range of interest rate the client is looking for as well as fees.  This way we do not have to chase them down in the middle of the day trying to get an OK to lock their rate.  As soon as our Rate Alert System notifies us rates are in the target range...we LOCK LOCK LOCK!

In the past, there have been so many people locking loans when we see a big rate drop, the lender's systems are overloaded and crash. The quicker your mortgage professional can get you locked.. the more likely you will get the rate you want.

Save yourself some money by being prepared to pounce on the next rate dip! I hope these tips help you to do so!