A first-time home buyer didn't lock in their mortgage rate and watched it climb, costing them thousands in higher payments. The speaker shares what went wrong and why timing matters when rates are moving.
Last week, a client that we had been working with for a couple weeks had gone under contract on their new home. The night before the big CPI inflation report was set to come out. I've been mentioning it for quite some time now. That's the biggest report every single month that dictates where mortgage rates are going to go. We recorded her a 6.25% FHA rate. We had advised her, hey, give us the contract and the property details so we can lock this rate in so you're protected. Because rates can be way better or way worse tomorrow if they're way better, no worries, we'll lock you with a better deal with a better investor of ours, which most lenders can do. She wanted to give her friend a chance. Her friend became a loan officer recently, so I want to give her a chance. First friend comes in at 6.6 to 5, but then doesn't lock the rate in. So the CPI inflation report comes in, the numbers are bad, rates go up and I advise, hey, get a locked in rate because that 6.6 to 5 isn't any good anymore. So finally, five days later, she gets a locked in loan estimate at 7.125. Do you compare that to the 6.25 we were originally advising? That's $250 a month more for her mortgage payments and now she's begging to get that original deal. So there's way more than meets the eye when finding your perfect lender. Make sure they get the best rate, but also make sure they know how to navigate the market, lock in at the best time.
