Sacramento, California

OPPORTUNITY: Our borrower, a professional civil service employee, was increasingly uncomfortable with her monthly housing payments and upcoming ARM rate change. Her existing loan amount exceeded the conforming loan limit by over $125,000, forcing rate and pricing into the Jumbo loan range.

SOLUTION: We took her loan application in advance, knowing that we needed to wait for an opportunity to lock a rate that would cost justify the loan. We sourced secondary financing sufficient to achieve a conforming first loan ($417,000) at an interest rate of 5.25% and with the completed loan application and appraisal in hand, we scouted all lending sources for the best pricing. We locked a new first loan at the bottom of a brief dip in the mortgage market on a Friday afternoon in late May -- volatility in the market can work to your favor if you are poised and ready to capitalize. We ended up reducing our clients mortgage rate from 6.125% to 5.25% in a period when rates are technically higher than 3 yrs ago. Our client will realize more than $14,000 in savings over and above recuperated financing expense during the next 5 years.