Mortgage Rate: Lock it in

One of the main reasons you would like to lock in your mortgage rate is to avoid the possibility of a high increased price and locking in your rate to safeguard you of rising prices and leaving you with lower payments down the road.

An abundance of fresh new homeowners, along with long term borrowers, oftentimes become hesitant or nervous when it comes to the thought of or actually locking in mortgage rates. By January of 2016, federal officials are predicting rate increases — rates are certainly unpredictable. With the amount of uncertainty and numerous unknown aspects, how do you know when it is the opportune time to lock in your rate?
It is not a possibility to predict the economy or harness our inner psychic and see the future (unless, you are psychic, but that is a different story). It was not at all expected when the real estate bubble bursted. During the economic crisis many people had to simply (but not so simply) walk away from their homes due to having almost blindly plunged into with two and three year adjustable rates. The federal officials had somewhat forecasted the possibility of increases. Obviously so, people were distraught when this had occurred. One of the main reasons you would like to lock in your mortgage rate is to avoid the possibility of a high increased price and locking in your rate to safeguard you of rising prices and leaving you with lower payments down the road.

Inquire with your lender about time frame: What time frame do you have for locking yourself into the mortgage rate. Typically, you will have about between two weeks and sixty days, however, nonrefundable fees, points, or deposits may be present.

Now, when your “home bank” is offering you higher rates than the lender had quoted, it may be time it just might be time to pull the trigger!

Everyone is competing for your business. Perform a Google search for the history of the rate for that lender, this will give you a tremendous amount of intel. If it is too far from what other banks and lenders are doing — find out why. It is up to you to determine if you are dealing with apples to apples or oil and water. Reminder: By checking historically, you can gauge what rates have been in the past.
Rates are ever changing, they come and they go. If you have a mortgage that fits your budget and finances well, then go with it. If it is too good to be true, chances are it is too good to be true. If you find a rate that fits your needs then make sure to lock it in.

Typically, borrowers hold off because they are unsure how many days it will take to find a home as well as having the offer accepted. They are a bit weary of locking in too early in the game, causing them to miss the opportunity for a much better rate prior to completing the purchase or getting locked into paying more to extend the lock once it has expired.

Many people find many difficulties in these situations. Not everyone was educated fully on mortgages and incomes. The terms scare people off. It is beneficial to find a real estate broker who has been educated solely in the field who can assist you in finding exactly what you need without you having to worry if you’re being taken advantage of, or not getting the best deal possible.

You can find out more about — Dennis Mahafkey, DennisMahafkey