When is the right time to Lock a Mortgage Loan?

 The Mortgage U! Mortgage Education Made Easy

For all your mortgage needs:
Dave Zwierecki
Phone 888-418-4467

 Home  |  About Us  |  Calculator  |  Contact Us  |  News   |  Blog  |  Sitemap 

 

Google
 
 
When is the right time to Lock a Mortgage Loan?
When considering the possibility of floating your rate versus locking the rate, remember there are professionals out there who spend their entire working time analyzing the market. They have a lot of money riding on the accuracy of their interest rate forecasts and the best that they have been able to 50 accuracy.

When your closing date is several weeks away, you may wish to ask your loan officer to lock your rate for a longer period of time. Lock periods up to 120 days or more are available on certain programs, but depending on the program may require a nominal upfront lock fee.

The most common lock period is the 30 day lock. The 30 day lock period gives the mortgage broker sufficient time to complete the mortgage loan. However a great benefit to using a mortgage broker over a bank is that id rates drop dramatically the broker can submit your loan to a new lender in minutes and secure you a lower rate.

If you lock your loan but do not close before the lock expires, you then are faced with worst-case pricing. If the rates have improved, you are stuck with the lock price, but if the rates have deteriorated, you are stuck with the present rate which would be worse than your rate-lock.

Why not just lock your interest rate in then for 120 days instead of 30 days to be safe from your rate going up you may ask? The answer is because the longer you lock your interest rate in for, the higher the interest rate gets. A longer lock is very risky to a bank, because they are guaranteeing that rate for an extended period of time and if rates get significantly worse, they could actually stand to lose money on the rate lock. Therefore, this is something to consider when deciding or working with your mortgage professional on locking in your rate.

The best question to ask yourself when you are considering locking a rate is: Do I really want to worry about interest rates every day, or can I live with the rate I have now? Rates can vary daily, no one can consistently predict the day-to-day fluctuations of interest rates.

If you are satisfied with the quoted rate then you should lock in your interest rate. Once the rate is locked you know that any market changes in interest rates will not affect you negatively.

 

Contact Us
If you have any questions regarding our products, you can contact us by calling or e-mailing us and we'll get back to you as soon as possible. Thanks!


Name
Current Address
City, State, Zip Code
Phone
E-Mail
Purchase/Refinance/Debt Consolidation

Comments/Questions/:



 
 
 Information listed above is to be used for educational purposes only and is not guaranteed

Home | Contact Us | News | About | Sitemap | Bad Credit | Homebuyer | Sitemap3 | Sitemap4 | Sitemap5 | Sitemap6 | Sitemap7 | FS Home Loan | No Money Down | First Security | Blog| Privacy Policy

Copyright 2007 First Security Financial Services, Inc.  All Rights Reserved... First Security Financial Services is a full service mortgage provider offering  mortgage educational tools in addition to hundreds of mortgage programs.                                                                                                                     Broker Outpost | What is Underwriting a Mortgage | Super Jumbo Refinance Loan | Quiken Loan | Do Credit Inquiries affect my credit score | Source of Funds For Down Payment | BANKRUPTCY is bad FORECLOSURE is worse | Super Jumbo Mortgage