One recent example highlighted by Hoff showcases the significant savings borrowers can achieve in today’s fluctuating market. “I locked one loan today that would have cost the borrower 1.213 points on Monday versus 0.375 today. This loan amount was $610,000, and the cost of the rate decreased from $7,400 to $3,200,” Hoff explained. With the average mortgage loan in the U.S. standing at $405,000, saving an additional 80 basis points could translate to monthly savings of $150 to $250, depending on the individual scenario. This presents a substantial opportunity for borrowers looking to maximize their financial benefits.
Hoff suggests that those who have recently purchased or completed a cash-out refinance within the last 12 to 18 months are in a prime position to take advantage of these favorable rates. Additionally, individuals who are currently in the process of buying a home or have been prequalified in the past year can benefit from securing a lower payment or potentially qualifying for a higher purchase price based on their debt-to-income ratio.
Proactively advising her clients, Hoff has implemented “rate alerts” to ensure they are prepared to capitalize on the optimal rate levels. Looking ahead, she anticipates volatility in rates, likening the market’s movements to that of the stock market. To mitigate potential risks, Hoff has already taken action by locking in three loans to safeguard her clients’ interests.
Cutting fees for VA borrowers
Patton Gade, the national director of military lending at UMortgage, shares his perspective on the current market conditions. While acknowledging the likelihood of a September rate hike being factored into the market, Gade emphasizes the importance of prioritizing minimal fees for VA borrowers. Rather than focusing solely on achieving the lowest possible rate, Gade advocates for structuring loans with minimal fees to provide veterans with a cost-effective financing solution. By offering loans with little to no fees, Gade aims to deliver maximum value to his clients.
Looking ahead, Gade remains cautious about banking on further rate drops into the low 6s and beyond, emphasizing the unpredictable nature of future market trends. Daniel Sa, a division president at NFM Lending, echoes this sentiment by proactively engaging with past clients to highlight the benefits of refinancing. Offering refinancing options with no lender fees and appraisal reimbursements, Sa is positioning his clients to capitalize on the positive shifts in the current mortgage rate environment.
As the market continues to evolve, Sa anticipates that the upcoming months, particularly between September and December, will present an optimal window for clients to refinance. By quoting competitive rates reflective of market conditions and potential rate reductions, Sa aims to empower clients to make informed decisions to optimize their mortgage terms.
Through strategic positioning and proactive communication, lenders like NFM Lending are committed to keeping clients informed and ahead of the curve. By maximizing financial benefits and enhancing overall satisfaction, these initiatives aim to ensure clients are well-prepared to navigate the evolving mortgage landscape effectively.