4.5% thirty year fixed, reality?

It sure seems that way. Most clients right now, up to 417k, are being locked into rates between 4.5% and 5.0% on a 30 year fixed mortgage. Some clients are waiting on the side lines because they think that rates are going to drop. Perhaps they might. I don’t have a crystal ball, but often times those who get greedy and think they can time the market are the ones kicking themselves after the fact. How many times on the show Deal or No Deal does the offer come out really high early on and the contestant keeps playing? This is what we do as Americans, we get greedy. My comment would be, haven’t we learned over the last 2 years of excessive greed from Wall Street and all around us. Let’s take what we can get and when we can get it. I spoke with a client last week that was going to save over $600 a month on his mortgage payment and did not want to lock because he felt rates were going to come down. If the rates dropped another .25% he was only going to save an additional $50.

Remember, as quickly as rates fall, they can go up just as fast. The crazy thing is if rates were to drop to 4% and you had a 4.75% loan you would refinance again, wouldn’t you? Of course you would, but if rates today are at 4.75% and next week they jump to 5.25% which is still low you would get upset with yourself for not locking when you had the chance.

Another crazy thing happened this week. Bank of America is going back to their investment bankers and asking for more money to close their acquisition of Countrywide and Merrill Lynch. Guess who their investment bankers are, the government, us, the tax payer. Did you get a letter letting you know the TARP funds we originally gave them were going to be used to buy other companies in there market place? It’s crazy that this is happening. I find it as a slap in the face to us. We keep doing business with these banks and on top of that, allow it to happen. What are we supposed to do now that this has happened? Let’s start to hold them accountable. Clean house, put new management in place to steer these big goliaths the right way. Isn’t that what we just did? We the white house, we the people did not like the way our country was going so we voted in a new President. Why are we allowing the same people to stay in these banks? All they are going to do is make the same mistakes over and over again. Remember, the mortgage meltdown that got us in this mess to begin with. Didn’t these big banks blame me the mortgage broker/banker for the mess we are in? Yes they did but on CNBC today they are not using that excuse anymore. They are coming to the reality of the situation that it was the leaders of these banks and their bad decisions that have gotten them into this mess. Do you think that Citi sold off Smith Barney because of the subprime mortgage mess? No, they did it because Citi does household finance. That is what they know, not where to invest your assets.

That is why at Samuel Scott we only do residential mortgages. We don’t do commercial loans, modifications and array of other stuff because we are the best at what we do. We put the client first, not our paychecks. I am sure the heads of these big banks are not paying themselves because of the mistakes they made.

Please remember us when considering refinancing or purchasing your next home we do those loans and we do them well with your best interest first. Give us a call and ask for Todd or Mark 858- 259-6070