Exhibit A: Wall Street investors are making life difficult for mortgage rate shoppers.
It used to be that California mortgage lenders issued pricing on a Monday morning and those rates were good for the entire week. Rate shopping was easy back then because everybody could take their time.
Today, not so much.
Because Wall Street has been somewhat manic lately, california mortgage lenders have had to publish mortgage pricing -- on average -- 3.07 times per day. That's more than 10 times per week.
Caifornia Mortgage rate shoppers have been caught in the crossfire because many are unaware of how quickly the ground is moving beneath them. The classic story is the homeowner that "wants to sleep on it", only to find that rates moved a quarter-percent overnight.
Changes like that happen more often than you think.
See, all year, stock markets and bond markets have been fighting over the same investment dollars and it's making mortgage rates act like crazy.
Mostly, this is happening because Wall Street has not been real strong on moderation this year -- it's either everybody in, or everybody out.
This lemming-like behavior has led to the highest levels of volatility in market history. So, for rate shoppers, just being aware of what's happening on Wall Street is half of the battle. When there's encouraging news about the economy, stock markets tend soar at the expense of bond markets, including the mortgage-backed bond markets. This is bad for mortgage rates and pushes them higher.
Then, in the other direction, when there's discouraging news about the economy, stock markets tend to tumble and bond markets tend to do quite well. This is good for mortgage rates and helps them ease lower.
Shopping for a California mortgage loan is a complicated process. It didn't used to be, but it is now. In addition to California mortgage guidelines that disqualify new groups of "fringe borrowers" weekly, mortgage rates are highly volatile and extremely unpredictable. What good is a great rate is your lender won't be there to close it?
In a market like this, a piece of solid advice is to saddle up with a lender you trust instead of looking for the absolute lowest rate and fee combination. It's important to save money but one of the little secrets of the business is that good lenders are usually among the cheapest to work with anyway.