mortgage simple definition: Locking in your Interest Rate

Locking in your Interest Rate

Locking in your Interest Rate. Roscoe the Mortgage Spokesdog #14 - Lock or Float

Locking in your Interest Rate video duration 2 Minute(s) 9 Second(s), published by Dean Hayes on 18 12 2018 - 06:48:40.

What is meant by the term, “locking my interest rate?” And then, when and how do I lock my interest rate? Locking your interest rate refers to guaranteeing a Watch ti learn when the best time to lock in your apr is.

Our proven process and my 15 plus years of mortgage experience provide timely mortgage strategies for financial opportunities in the moment and over time What is a rate lock? 🤷 ♂️ Rate locks are in reference to the interest rate on your mortgage A rate lock, or "locking your rate" is using the current day's interest Roscoe answers the question "should you lock your mortgage rate at application?"

What is meant by the term, “locking my interest rate?” And then, when and how do I lock my interest rate? Locking your interest rate refers to guaranteeing a specific interest rate for a specific period of time. That period of time is called the lock period. The lock period guarantees your rate as long as your loan closes and funds prior to the expiration date of your lock. If your closing is delayed beyond your lock expiration date, you could be exposed to higher market rates or lock extension fees, so it’s always good advice to lock for a period longer than you need or longer than your actual closing date. Typical lock periods are 15, 30, 45, 60 and 90 days.

All things being equal, shorter lock periods provide you with a better interest rate. Remember though, I said “all things being equal,” and things are rarely equal. The market can be volatile, and rates move with market activity, up and down. So let’s look quickly at the four possibilities for rates:

* Rates can go up slightly
* Rates can do down
* Rates can stay the same
* Rates can go way up.

If rates go up slightly, you might still benefit by waiting to lock because of the shorter lock commitment period. If rates go down, you would definitely benefit by waiting to lock, and if rates stay the same you would also do better to wait. Of the four scenarios, you benefit from a longer lock only when rates go up significantly after you lock. Unfortunately, none of know with absolute certainly what interest rates will do tomorrow or into the future. For that reason alone, I'm a big advocate of locking your interest rate as soon as you come under contract to protect you from interest rate hikes.

When preparing your initial application, we will intentionally use a higher rate to qualify you with. In the event that rates do go up prior to locking in, you’re still pre-approved and we do not have to re-approve you, so you’re not exposed to any more paperwork. Once you have a property under contract, we will then simply lock you in at the current market rates.

http://blog.bayequityhomeloans.com/dean-hayes/2016/10/19/10-things-to-know-during-the-mortgage-loan-process-question-4-how-and-when-do-i-lock-my-interest-rate/