We have a current client who is Pre Escrow with a short sale property that we were able to procure for him. In a typical real estate transaction, after the offer is written and the back and fourth counter's take place, once both parties agree to the terms (seller and buyer), escrow is opened and the deposit check that was written, that accompanied the offer, is deposited into escrow. That is a typical real estate transaction that is not very typical in today's Santa Clarita real estate market.
However, my client is in a Pre Escrow "holding pattern" on a Short Sale. Meaning his offer was accepted by the "human seller", but the bank has yet to approve the sellers short sale. Once that happens, then escrow will officially open, and the same developments will take place as in the above paragraph reference to time frames etc... And yes, it could take months to complete or to even get just an approval from the Bank that owns the "short sale".
During this time, our client was contacted by another lender. That lender was trying to "steal" him away from the lender he was currently working with. After asking our client some questions, he asked what rate he was given by his current lender. He told him and the pitching lender stated, "I can beat that rate...". My client asked me if that was true and I explained the following.
I said that was silly. "We don't know what the interest rate is going to be when the short sale is ultimately approved and escrow opens. That is when the "interest rate lock" takes place, when escrow "officially opens". A lock can only be held for a period of 45 days, for a lock of a longer term, it costs money. For a lender to tell you that he can beat the rate is putting the cart before the horse..."
I asked my client what that lender said about beating the "fees". He said that he could not beat the fee's, but reminded him about being able to beat the interest rate contained in his Good Faith Estimate. I also commented that today, the interest rates are lower than on the date he rec'd that Good Faith Estimate. But as in all real estate markets, interest rates rise and fall constantly.
Rates may be going up but don’t panic. Data shows that rates have now risen slightly over the past three weeks and while may may be feeling like they have missed the boat for taking advantage of exceptional affordability levels this is not the case. Consider the fact that a year ago rates were averaging around 4.15% for a 30 year fixed rate loan, today’s rate of 3.62% is a very good rate.
A few weeks ago rates hit a historic low of 3.38%, and incredible opportunity for anyone who qualified. 3.62% still offers exceptional affordability, adding to low home values and certainly adding incentive to home buyers around the country. Loans have loosened up, although they are certainly more intensive to secure than they were in the height of the heyday.
While rates may be climbing they appear to be doing so at a snail’s pace which is good news for any buyers who were holding out for signs of an absolute bottom. It’s a great time to invest in real estate, whether for a primary residence or a rental property. Contact your local REALTOR today to learn more about current market conditions and recommendations for reputable lenders.
Be safe and check out some of our REMAX of Santa Clarita Resource Websites, thanks!!!