Mortgage rates hit another record low in Bankrate's weekly survey, with the 30-year fixed falling yesterday to 4.88 percent.
Judging by the yields on mortgage bonds, the average rate should have been two or three basis points lower than that.
Mortgage planner Jim Sahnger tells me: "Borrowers should be aware that as pricing has improved, I suspect that lenders have seen applications increase and are using pricing as a tool to impact the flow of new applications and also improve their bottom line where possible."
You're nodding your head if you're in the mortgage biz; scratching your head if you're not. What Sahnger means is this: As mortgage bond yields fall, lenders aren't necessarily passing all of the savings along to you. Instead, they're either using this as an opportunity to make more money while they can, or they have as many applications as they can handle, and they're keeping rates up to keep from being overwhelmed with new applicants. Or both.
Sahnger adds: "You might suggest that prospective borrowers lock when appropriate as rates may worsen even in the face of what would seem to be an improving rate environment."
That's implicit in my weekly mortgage rate analysis, and I should have pushed this point more clearly. Ask the loan officer or broker how long it will take to close the loan, and then lock the rate long enough to cover that period. And then respond promptly (like, within a day and preferably within hours) whenever you're asked to provide more paperwork.
If you gave the lender your last two pay stubs, and then a few weeks later the lender asks for your most recent pay stub, skip the grumbling and just submit the new pay stub. Quickly.