Mortgage Rates, Purchase Campaign, Refinance Campaign

Is Right Now The Best Time To Lock Your Mortgage Rate

October 21, 2010 by · Leave a Comment 

Time Is Money by TPopova | iStockphoto.comWhen it comes to mortgage loans and interest rates, it’s never a good idea to gamble. That’s why we typically advise our clients to lock in an interest rate at the earliest opportunity.

This is just one step of the standardized system we have put in place to ensure the best possible home loan experience for each borrower that we work with during the home loan process.

In case you you were wondering a mortgage loan cannot be closed without a locked-in interest rate, and there are three main elements to take into consideration:

  • Interest Rate
  • Points or fees
  • Length of the lock

Locking in an interest rate does not obligate you to commit to the home loan until the home purchase or home refinance is actually closed. The lock is merely a security measure designed to eliminate the risk of market volatility throughout the duration of the home purchase or home refinance transaction.

As long as the home loan is approved and funded before the end of the lock period, you will receive the interest rate quoted.

When a home lender permits an extended rate lock-in period, you will likely face a higher interest rate or additional fees that could be quoted as points. In other words, you will pay for the lender to take on the extended risk of being exposed to potential changes in the market.

For example, let’s say a 30-day rate lock commitment costs a borrower one-half point, while a 60-day rate lock commitment costs one full point. If the borrower in this scenario needed the extended lock period, but did not want to pay points, then an alternative would be to accept a slightly higher interest rate. In this case, a 60-day rate lock would typically have a higher interest rate than a 30-day rate lock.

Mortgage rates fluctuate daily, hourly and sometimes even by the minute.

If you are the type who prefers a sure thing then our standard procedure to lock-in a mortgage rate as quickly as possible is just what you need.

On the other hand, if you like to sit on the fence and test the waters with no safety net then floating your interest rate is your perorgative. Just remember that you will eventually have to lock-in an interest rate in order to close your home loan.

By knowing your needs and working intimately with you to make the right decisions early on, we are positive that we can help you achieve your dream of home ownership just in time.

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James K Barath, CMPS®

James K Barath is a Certified Mortgage Planning Specialist®, Certified FICO® Professional, Certified Military Housing Specialist® and your FHA Home Loan Expert. He is also a graduate of Purdue University, The CMPS Institute, Dale Carnegie Human Relations Course & Napoleon Hill Foundation's PMA Science of Success Class. It's your home and your future. It's his profession and his passion. He is ready to work for your best interest. Contact James for your FREE Home Loan Approval !  His Motto: I Facilitate the American Dream Through Responsible Mortgage Lending and Financial Literacy!

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