Locking in Loan Rates
It is important for both new homebuyers and homeowners who want to refinance to understand how to lock in an interest rate when applying for a mortgage loan. Understanding how rate locks work prepares you to evaluate your options.
While you are in the process of applying for your mortgage loan, interest rates will most likely fluctuate from day to day and week to week. If you want assurance that the wonderfully low interest rate on your loan will not increase while you are waiting for loan approval, ask for a rate lock. A conventional rate lock is a guarantee from the lender that your mortgage will carry a particular interest rate, with specific, predetermined points and fees.
The interest rate is "locked in" for a specified period of time, usually thirty days. When you call a lender for a rate quote, ask how long that rate will last for. If you think you might need more than thirty days to complete your home purchase or refinance, tell your lender how many days you will require, and they will give you an adjusted rate quote.
Rate locks are especially useful if interest rates are on the upswing, and you are concerned about ending up with higher monthly payments. If you cannot afford the risk of a further interest rate increase, lock in your loan rate now.
Do These Real Estate Tips Really Apply to YOU? We've learned these tips through experience. But we know that YOUR situation might be different. That's why we're here. It's our job to personally advise homebuyers and sellers. Ask us if any tip that we've included here really applies to your situation. Do any of these tips raise questions for you? Didn't find what you're looking for? Let us know! We are happy to answer ANY questions. It's our job! There's no obligation, and we promise to get back to you quickly...
| Q |
Over what famous building is aircraft forbidden to fly at any time?
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| A |
No aircraft is permitted to fly over the Taj Mahal in India. |
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