On January 22, 2008 the Federal Reserve voted to reduce the Fed Funds rate by .75%. This was a surprise move, and the effect on mortgages was swift. By the next morning, Wednesday the 23rd, the par rate we could quote for a 30 year fixed rate was at 5%, down from 5.5% just a few days before. The result was that many people could obtain a no cost loan at 5.5% or 5.625% depending on the size of the loan.
Alas, by the time we could tell anybody about it, the rates had shot back up to 5.5% or higher on the 23rd. No costs were above 6% again. The window was shut. The bird had flown the coop. I was frustrated.
Out of my misery an idea formed. Why not find out what rate people would like to refinance at, ahead of time? Most folks are inundated with persuasive offers to refinance, because it would be good for the lender's business. Why not find out what would be good for the homeowners business? Why not offer a means to deliver when the market presents the right circumstances?
This is critical. We stick by and guarantee our flat fee pricing policy. Since we guarantee we won't make more than what we have agreed to on the open order form, we have no incentive but to credit everything the market offers. We're committed by the agreement to pass the savings on to you.
**Best Efforts: We have every incentive to deliver when the opportunity presents itself, but we cannot guarantee that events may prohibit us from being able to deliver at that time.
Sound good? Click here.