Mortgage this! If you can.

Last week the Fed shocked me a bit by lowering its target rate to “0 to 0.25” percent. Wow!  I had expected the target to be lowered from 1 percent to either 0.5 or maybe even 0.25.  The fact that zero is part of their new range did surprise me.

The next day some folks I knew were on the phone with credit unions and banks trying to snap up mortages rates as low a 4.5%.  These institutions were advertising rates as low as 4.5% for 30-year fixed mortgages on their websites that morning.  But several unfortunate outcomes occurred:

  1. They filed the online application but the return call from the bank to finalize and lock in the rate did not come in time (2:00pm or 3:00pm).
  2. Calls to lenders were not being answered nor returned.
  3. Provisions to existing loan customers were revoked that day (e.g. the option and promise to re-lock in a 30-day period for a cost of 25 basis points was removed without notice).

I read about some lucky re-financers who did get the amazing morning rates, but none of the people I spoke with in person were able to secure the morning’s web-advertised rates.

I have a couple takeaways from this mini-refi frenzy. The first is a question, “What ever happened to service in financial service?”  The second is more practical: that with the rate cuts and other potential Fed action, that it is again worth exploring mortgage refinancing options… despite the pain and inconvenience that is increasingly part of the process.

There is a ton of financial action in recent weeks.  I’ve been slow on the blogging, and I’m sorry. I’ve got plenty of excuses including the holidays, but I’ll spare you the details. I’ve got a ton of things to explore and will do what I can in the next two weeks to blog about  a number of things that are on my mind including more on interest rates, TARP, the automakers, huge currency moves, the economy, and even “Fishing with NNT”.  Happy

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