Locking In Your Rate

You never know when the lowest mortgage rate will be available to you, but with good timing, a little knowledge, and the help of your mortgage lender, you can lock in the interest rate once you have a ratified contract on a property.

 In a previous blog we discussed why the mortgage rates are so low, however they're constantly changing. This fluctuation makes it difficult to know when is the perfect time to lock in a rate. The last thing you want is to find your perfect house, only to learn the interest rates have gone up, or that you have to pay thousands more in points. In this blog I will be discussing how to lock in the lowest rate possible to save you the most money.

The process of locking in an interest rate varies from lender to lender.  Interest rates can vary on a daily basis.  While there are many variables that can impact interest rates, the most common reason for interest rate fluctuation is whether economic news is stronger or weaker than anticipated.  It will sound funny, but in order to have lower interest rates, you want to hear weaknesses in the economy with low inflation.  This combination will keep interest rates low to stimulate the economy.  Lenders typically have set times, Monday through Friday when the quotes are available and when you must lock in by in order to secure the agreed upon quote.

There are a few things to keep in mind regarding a mortgage rate lock-in to help ensure you are getting the best rate:

·          A rate quote is different than a rate lock - a quote has not legally binding and subject to change as the rates change; a rate lock secures that interest rate at the time of closing and is a binding agreement

·          Be organized and prepared; you may lock in once you have a ratified contract on a property and your settlement date is within a lender’s lock period.

·          It is best to have a specific property in mind and even better to be close to closing

·          Get the rate lock in a legally binding document, not just a verbal offer

·          Make sure the lock covers you to the settlement date

When locking in a mortgage rate, let your mortgage lender guide you through the process. Know your estimated closing date, and try to time your rate lock with that date. If you estimate 30 days to close, find out what the interest rate would be if you locked it for a 45-day period. You can't afford to take more time then you should.

You can save a lot of money by locking in the lowest rate possible to you, so it is worth the effort. The important thing is to get your rate on a day it's low and lock for enough time to close your loan. Interest rates are constantly changing, and currently they're the lowest they've been in years. Intercoastal Mortgage Company can help you obtain the best possible rate for you. Contact me and Iwill assist you in locking the interest rate for your loan.