The Fed's action this week (reducing the Fed Funds rate by 3/4%) has brought some more much needed relief to the American homeowner. Anyone with a HELOC tied to Prime (currently 5.25%) is seeing immediate savings. The mortgage market remains extremely volatile however, with most lenders receiving multiple reprices to their rates each day. The rates that are quoted in the morning are very often different by the afternoon. This is largely due to the continued lack of appetite by the end investors for mortgage related debt. Adjustable Rate Mortgages are priced worse than 30 year fixed rates in most cases (although ARMs do seem to be one of the decent options in the Jumbo market).

With the extreme swings in interest rates daily and even intra-day, it is important that you protect your buyers. Encourage them to work with a lender that you are confident will deliver. Have the client call their lender the day they actually make any offer, even if they spoke to their lender the day before. Put deadlines on any offers that you make that force the seller to ratify within a day or two. Once your client is under contract, encourage them to lock in with their lender quickly, before the rate that they are expecting is changed.