Answers
When is the best time to lock in a mortgage rate?
I am closing Aug 12. Should I pay the extra fee to lock 60 days out or is that a shame?
Best Answer:
A couple of things to keep in mind. Mortgage brokers really have no idea about what rates are going to do. I wouldn't work with one if he told you he did. Also, you can actually get a slightly better rate by locking for a shorter term (a 15-day lock as compared to a 30-day lock). Most brokers won't share that with you but if you ask and show that you know what's going on, you can get a better deal. For this reason, you'll normally want to wait until after you've signed your sales agreement and know that the title and appraisal are going to come back without problems. Your bigger, national banks offer snazzy things like float-downs and more things to confuse you. I can't speak to them because I'm not familiar. I'd just say be careful about spending money out of pocket. If you decide to go elsewhere for the loan or the lender makes a mistake, you may loose that money and have to start from scratch somewhere else. You should get the money back if the lender goofs but I've seen people get stiffed before. However, for every horror story there's a billion loans that went just fine. I realize your question is specific to market timing. I highly suggest against this. Your question is similar to someone investing in mutual funds. Do you invest in stock funds or bond funds? Well, that depends on your risk level. If you're a bond fund kind of guy, just lock it. Worst case scenario is that you'll get the interest rate that everyone in the country is getting today. Best of luck!
Answers:
When the rates are lowest... duh.
But seriously you don;t know what the next 60 days could hold. Rates could go up. Rates could go down. A good mortgage banker or broker (someone you trust, not just someone you are paying) should be able to give you some good insight into what the future may hold. My last mortgage I save a quater percentage point because my broker told me to wait another week before locking in my rate.
Best advice find someone you can trust and go for it.
now is the time,.,, interest rates change daily,, it's like playing on the stock market.. the rate will be going up. so it may make sense you lock now for extra.. depends how much it would coist you to lock for 60 days.. what if your escrow delays? you will lose your lock and will have to price it at then-market price...
Here is another POV... Your broker should be able to find basically the same loan in several places. Have him/her lock it at one now. If in 30 days the rates are much better he/she can either get the lender to honor the better rates or just move your loan to a different lender thus solving all of your issues in one shot.
Also... yes a 15 day lock should be better however that really puts you under the gun if there are any issues that come up in underwriting. I try and have my file to the lender with 20+ days until closing. This way if I hit a bump in the road I can either figure it out or move to another lender and try again with the file configured in another way with time to spare.
Best of luck on your new home!
Kevin 866-562-6838 x 106
Kruorock@firstratelending.com
Try to find out what other companies you can go through at the same rate. You can find a company that won't charge you or have the Loan officer you are working with go for a 45 day lock and get an extension to get you the extra time you need.