“I have read statements by you regarding ‘live mortgage pricing’, but I am not sure what it means, or why it is important?”
A live mortgage price quote is a price that the lender is prepared to lock at the time of the quote. A lock is a binding commitment to make a loan at the prices and terms specified in the lock agreement. A live price quote is believable. A price that is not live, for any of the reasons given below, is not believable. Yet many borrowers shopping for a mortgage select lenders on the basis of price quotes that are not live.
Lapsed Mortgage Prices
One reason a price quoted to you is not live is that it has lapsed. It was live, but no longer.
Mortgage prices are set by loan originators on the basis of secondary market prices. Most loans are sold into that market after origination. The practice is to price loans in the morning of each business day, after the secondary market has opened and trading prices have emerged.. Those prices will hold for the remainder of the day, unless there is a significant change in the secondary market, in which case the opening prices will be replaced by new prices.
Price quotes after the close of business are the prices that existed at the closing. Comparing the prices of different lenders over a week-end, when web sites show Friday’s closing prices, is convenient and can make your shopping more efficient. But before making a selection decision, wait for the closing prices to be replaced by live prices on the morning of the next business day.