Lock Mortgage Rate?

Question

My husband and I are trying to decide if we should lock our mortgage rate this week. We are going to close on the house somewhere between December 14th-21st...should we wait and get a 30 day lock, or do it now while the rates are low? Do you guys think the rates are going to go any lower...I have listed our quote below

6% - with .375 point
6.125% - with no points

These rates are for a 30 year fixed loan...

Answer 1

When in doubt, lock.

I tell people that if it's not locked, it's not real.

Many direct lenders have "float down" provisions. Ask about them. And if rates go down, brokers always have the option of submitting elsewhere (which often means the lender will give us a float down to avoid losing the business)

On the other hand, if it's not locked and the rates rise (and A paper varies every single day at a minimum), you're SOL. You pay the higher price. Period.

There's a lot more to this. The longer the lock, the more you will pay for it, and of course, if the quote isn't guaranteed, it's likely to be vapor (and if you haven't got a lock, you never have a guarantee).

Answer 2

How much is the extended lock going to cost you?

30 day locks are usually free. Anything above and beyond that normally costs.

On a $350k mortgage, your montly payments will be about $30 different between the 6% and the 6.125%

And the discount (points) will cost $1312. Meaning it will take you almost 4 years to start seeing a return on the discount you bought. And in the long run will save you about $9000 over a 30 loan.

Do you really plan on keeping the same mortgage for 30 years? How about 4? Is there a pre-payment penalty? If so, then maybe the discount is worth it.

As far as rates dropping again...Possibly, I haven't followed the market enough to see if the public sector has seen the effect of the Fed reducing rates.

Normally there is some delay.

Answer 3

The bank I work for offers 30 to 120 day locks, but we usually discourage anything over 60 days -- and that only for New York State. With us, the rate increases with each lock period, so that if you're paying 6.125% for 30 days, you might pay 6.5% for 60 days and 6.75% for 90 and so on.

Be sure to find out what happens when the rate expires. We add rate lock extension fees in the amount of .00015% daily.

Answer 4

i do no longer even think of it relatively is a ethical predicament. maximum creditors do no longer close decrease than any words different than the lock as quickly because it relatively is been submitted. there may be exceptions, yet generally the lock is you and the lender agreeing to that fee. in fact, they're taking this lock dedication to you into consideration at the same time as they're coping with their very very own liquidity. yet while the charges bypass "way down" (and that would not ensue very oftentimes frankly) you're fullyyt loose to take your business enterprise someplace else, and that i do no longer think of there is even something ethically incorrect with that. some creditors attempt and dissuade you from doing this by making use of charging application and lock-in costs - yet it relatively is purely by way of fact they're terrified of people identifying to purchase and comparing. a large number of respected brokers do no longer charge the two of those costs. finally you would be superb served by making use of making use of a private loan broking service who can lock your fee in with one lender, at the same time as protecting a watch on what the industry supplies with different creditors. That way you will get the superb fee no remember if costs bypass up, down, or stay an identical.

Answer 5

Get it locked now! Waiting only costs you more money.

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