fbpx
When do you lock your mortgage rate?
Locking your interest rate protects you from increases due to market conditions. Locking early safeguards your budgeted payment. By locking the rate, if the market goes up, you get the lower rate; if it goes down after the lock, you may be able to pay a fee and lower the rate. Knowing when to take […]
When do you lock your mortgage rate?
Locking your interest rate protects you from increases due to market conditions. Locking early safeguards your budgeted payment. By locking the rate, if the market goes up, you get the lower rate; if it goes down after the lock, you may be able to pay a fee and lower the rate. Knowing when to take […]

32597907-e754-4452-95b1-74d51fc8f475.jpg

Locking your interest rate protects you from increases due to market conditions. Locking early safeguards your budgeted payment. By locking the rate, if the market goes up, you get the lower rate; if it goes down after the lock, you may be able to pay a fee and lower the rate.

Knowing when to take the lock is determined by which direction you think the market is going. If you think rates are going up, lock in early. If you think rates are going down, ride the rate to within a few days of closing.

Some lenders may allow a borrower to lock a rate after pre-approval but is more common to not offer a lock until there is a signed contract on a home. Even with a pre-approval, it could easily take 30 days or more to close a transaction and the rates can move a lot in that period.

There may be a fee charged to lock a rate which is determined by the lender. Generally, the longer the time for the rate lock, the higher the fee.

There is a lock period established by the lender that guarantees the rate, if the loan is closed by the expiration date. Normal lock periods can be between 30 to 60 days. Longer periods may be available but will probably require higher fees.

Things that could affect your rate lock are:

  • The appraised value comes in lower than what was expected in the sales contract.
  • The borrowers’ credit changes considerably before the closing.
  • The loan amount changes after the rate lock.
  • The loan type changes.
  • The down payment decreases before the closing.
  • Some income, like bonuses or overtime, could not be verified.

If a higher rate at closing means that you will no longer be able to qualify for the mortgage, it may be more important to lock in early. Looking at what the rates have done for the preceding weeks may indicate a trend but at the same time, markets have turned overnight and started moving in the opposite direction.

A trusted mortgage professional can give you good advice and why they feel you should either lock the rate or let it ride. Your real estate agent can help also but ultimately, the decision is yours.

LIST OF BLOGS

The Skinny on 1031 Exchange

The Skinny on 1031 Exchange A 1031 exchange refers to Section 1.1031 of the Internal Revenue Code which was passed in 1990. After the death of a 1031 Exchange that is no longer always the case. What kinds of Property Qualify? A 1031 Exchange enables sellers of some...

Realty Investment Trust

Property Investment Trust Realty Investment Trust: Enabling you to be a part of the celebration Genuine estate is a huge organization and everybody appears to desire to invest in genuine estate. There are stories about individuals who made $50000 in a fortnight by...

Do Not Become a Mortgage Industry Crisis Statistic

Do Not Become a Mortgage Industry Crisis Statistic It's obvious that the U.S. real estate marketing is having among its biggest downturns given that the early 1980s. Get a paper or switch on the news and you are swamped with a day-to-day report of more foreclosures,...

5 Things You Should Know Before You Flip A Property

5 Things You Should Know Before You Flip A Property When turning a home your cash is made at the purchase not at the sell of the home. Lots of times individuals purchase a home with the intensions of making a big revenue just to discover out that they might not make...

Tax Benefits Available through Investing in Rental Property

Tax Benefits Available through Investing in Rental Property If you currently own a home you might be rather familiar with numerous of the tax advantages used by owning rental home. By utilizing a home loan to acquire rental home you extremely well might be able to...

1031 Exchange Companies

1031 Exchange Companies The most convenient technique to start a 1031 Exchange deal is to get in touch with a great Exchange Company. The info worrying the exchanger, time and location of the closings, and a copy of the agreement to offer the given up residential or...

Is It Time To Buy A House?

Is It Time To Buy A House? At some point as you're composing out your lease check, you get to the point where you look at the quantity and believe to yourself - at this rate, I might BUY a home. If you're fed up with paying lease every month that's high enough to fund...

How to Sell Your House by Lease Options

How to Sell Your House by Lease Options Lots of people purchase a home then need to move within a couple of years, due to divorce, moving or monetary troubles. With no equity however, it can be almost difficult to discover purchasers and you still have real estate...

Taking care of a Rental Property

Taking care of a Rental Property Those who live in a rental residential or commercial property might have concerns concerning how they must care for their residence. While dealing with the residential or commercial property with regard and not purposefully doing...

RECENT POSTS

1031 Exchange Companies

1031 Exchange Companies The most convenient technique to start a 1031 Exchange deal is to get in...

ABOUT  TWENTY
THREE HOMES

The Twenty Three Homes are one of the premiere real estate groups locally, nationally and internationally, specifically dealing with high-end properties and exclusive clientele. Partner with Keller Williams Twenty Three Homes are full service real estate experts whose clients benefit from the custom tailored, hands on service while receiving all the exclusive amenities and resources of one of the most established and respected firms in the business.

GET IN TOUCH