If you are not aware of what a mortgage rate lock is, it is an action that locks in your mortgage rate prior to closing. Commonly Mortgage Rate Lock is done in the 30-60 day range from your anticipated close date. Knowing what a Mortgage Rate Lock is and how you can lock in your interest rate at the proper time is a very important action to take and can save you thousands of dollars over the course of the loan.
What a Mortgage Rate Lock is, is an agreement made with your lender that allows you to hold the current interest rate for a specified number of days typically between 10-60 days. If you go through the mortgage process and you don’t do a mortgage rate lock what will happen is your rate could change all the way up to the time of closing and can cost you money by increasing your payment or you can possibly save money by getting a lower interest. Given in these conditions the rates are historically low, the likelihood of your rate dropping before you close is slim, but could happen. If you don’t lock your rate and your interest rate increases the ramifications could be disastrous as this increase could possibly change your debt to income ratio outside the requirements for your loan program.
When you are thinking about “Should I Mortgage Rate Lock” this is where the big gamble will come into play. If you are under the impression that rates will rise, then by all means lock in your mortgage rate, however, if you feel rates will stay the same or even decrease, then hold off and wait it out. What you need to ensure when you are purchasing a home or looking to purchase a home and want to avoid Mortgage Rate Lock, get a solid pre-approval letter to make sure you can close your loan in 30 days and I am the guy who can do that for you at Loan Consultants.
When dealing with Mortgage Rate Lock what you do know is that there isn’t certainty involved when closing on your mortgage loan. Another thing you need to know about a Mortgage Rate Lock is it is not free by any means. The longer you want your Mortgage Rate Lock to be, the more expensive it can cost you. For example, the difference between a 15-day lock and a 60-day lock could be up to 0.50% on your interest rate which can cost you over $100 per month and will cost you over $1,000 per year. There are also cases where the fee to lock can be paid for upfront with a lender credit. Under this circumstance you won’t see an increase in your interest rate. You might also be wondering when the best time to Mortgage Rate Lock is and if you are working with an efficient lender and experienced loan officer, then you will not need more than a 45-day lock, and more than likely you can go forward with a 30-day lock if you feel your lender has a firm grasp on your file. In any case, your loan officer should be aggressive in not forcing you to take more time on your lock than needed.
Mortgage Rate Lock can be a tricky slope to maneuver on, but with the right mortgage professional in your corner, there shouldn’t be a worry. This is where I come in and Loan Consultants can help you 100%. I am here to work with you 24-7-365 and you can always get a hold of me whenever you need me. At Loan Consultants we don’t work 9-5, we work all day, every day. At any time please feel free to call 888-900-1020, email me at email@example.com, or visit www.loanconsultants.org.